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MSC-3 FORM (RETURN OF DORMANT COMPANY)
A Dormant Company is a company that has been incorporated but has not carried out any business activities or has been inactive for two consecutive financial years. Such companies can either continue as dormant or be reactivated as per the Companies Act, 2013. The Ministry of Corporate Affairs (MCA) mandates annual compliance even for dormant companies. Company Mitra provides expert guidance and hassle-free assistance in filing the Return of Dormant Company, ensuring complete compliance.
📋 REQUIREMENTS
✔ The company must be classified as dormant under Section 455 of the Companies Act, 2013.
✔ No business transactions except essential maintenance expenses.
✔ No significant accounting transactions other than fees, taxes, or compliance-related payments.
✔ MCA approval for Dormant Status.
✔ Annual return filing (Form MSC-3).
🎯 BENEFITS OF DORMANT COMPANY RETURN FILING
✅ Legal Compliance – Avoid penalties and maintain active dormant status.
✅ Easy Revival – A properly maintained dormant company can be easily reactivated.
✅ Asset Protection – Helps in securing assets like trademarks and intellectual property.
✅ Avoid Strike Off – Non-compliance can lead to compulsory removal by MCA.
✅ Minimal Compliance Cost – Dormant companies have fewer compliance requirements than active companies.
Documents Required
- For Filing MSC-3 (Annual Return of Dormant Company)✔ Board Resolution for filing the return✔ Financial statements for the year (even if NIL transactions)✔ Details of directors & shareholders✔ Declaration of no significant transactions✔ Proof of compliance payments (if any)
📌 3-5 working days for filing MSC-3 after document submission.
📌 Step 1: Consultation & Documentation Verification
📌 Step 2: Preparation of Financial & Compliance Statements
📌 Step 3: Filing of MSC-3 with MCA
📌 Step 4: MCA Scrutiny & Approval
📌 Step 5: Compliance Confirmation
1️⃣ What is a Dormant Company?
A company that has been inactive for two consecutive years or has no significant transactions.
2️⃣ Why is it necessary to file MSC-3?
To maintain the company’s dormant status and avoid penalties.
3️⃣ Can a Dormant Company be reactivated?
Yes, by filing MSC-4 along with necessary documents.
4️⃣ What happens if a Dormant Company does not file returns?
MCA may strike off the company and impose penalties.
5️⃣ Is there any government fee for filing MSC-3?
Yes, the MCA charges a nominal fee for submission.
6️⃣ Can a Dormant Company hold assets?
Yes, it can hold assets but cannot conduct business operations.
7️⃣ Can a Dormant Company have employees?
No, it cannot have employees except for compliance purposes.
8️⃣ Can foreign directors file Dormant Company returns?
Yes, but they need a Digital Signature Certificate (DSC).
9️⃣ What are the tax implications for a Dormant Company?
It must still comply with income tax and GST regulations if applicable.
🔟 Can a Dormant Company issue shares?
No, share transactions are considered significant transactions.
1️⃣1️⃣ What is the validity of Dormant Company status?
Indefinite, but it must comply with annual return filings.
📅 COMPLIANCE REQUIREMENTS & DUE DATES
| Compliance | Requirement | Due Date | Consequence of Non-Compliance |
|---|---|---|---|
| MSC-3 Filing | Annual Return for Dormant Company | 30th April (Every Year) | ₹10,000 penalty & risk of strike-off |
| Financial Statement Submission | Even if NIL transactions | Annually | Mandatory for compliance |
| Conversion to Active Company (if applicable) | Filing MSC-4 | As per company decision | Required before starting business operations |
⚠️ PENALTIES & INTEREST FOR NON-COMPLIANCE
| Type of Non-Compliance | Penalty/Fine | Other Consequences |
|---|---|---|
| Failure to file MSC-3 | ₹10,000 penalty | Risk of company strike-off by MCA |
| Non-maintenance of compliance records | ₹50,000 fine | Legal action against directors |
| Conducting business while dormant | ₹1,00,000 fine | Dormant status revoked, legal liabilities imposed |
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