Before Filing Form 38, applicant must know the annual requirements after obtaining the status of inactive company. Form D

Section 424 (1) of Companies Act 2017

Inactive Company.—(1) Where a company, other than a listed company, is formed for a future project or to hold an asset or intellectual property and has no significant accounting transaction, such a company or an inactive company may make an application to the registrar in such manner as may be specified for obtaining the status of an inactive company.

Explanation.—For the purposes of this section—

(a) ―inactive company‖ means a company, other than a listed company, which has not been carrying on any business or operation, or has not made any significant accounting transaction during the last two financial years;

(b) ―significant accounting transaction means any transaction other than

— (i) payments made by it to fulfill the requirements of this Act or any other law;

(ii) allotment of shares to fulfill the requirements of this Act; and

(iii) payments for maintenance of its office and records.

REGULATIONS

36. Inactive Company .—

(1) Subject to the provisions of section 424 of the Act, a company may file an application to the registrar as per Form 38 for obtaining status of an inactive company.

(2) An inactive company shall comply with the following requirements to retain its inactive status in the register—

(i) shall have minimum number of one director in case of a single member company, two directors in case of a private limited company and three directors in case of public limited company;

(ii) shall file Annual return on Form D along with payment of annual fee as per Seventh Schedule to the Act.

(3) Any company which was earlier granted status of inactive company and now desirous of starting operations shall apply as per Form 39 to the registrar to become active company.