Commencement of Business – Form INC-20A

The Companies which are registered after the commencement of the Companies (Amendment) Ordinance, 2018 in India and is having a share capital shall file a declaration for the commencement of business certificate before commencing any business or exercising any borrowing powers. Any company which is incorporated after 2nd November 2018 is required to get a Commencement of Business Certificate.

Legal Provision for Commencement of Business

As per Section 10A of Companies Act, 2013 which states that a Company incorporated which is incorporated after 2nd April, 2018 having a share capital shall commence any business or exercise any borrowing powers after shall file a declaration in E-form INC- 20A to be filed by a director within a period of 180 days from the date of incorporation of the Company in such form and verified in such manner as may be prescribed with the Registrar of Companies declaring that every subscriber to the memorandum who has agreed to subscribe the memorandum has paid the value of the shares agreed to be taken by him/her on the date of making of such declaration.

If a company pursues any objects which requires registration or approval from any sectoral regulators such as The Reserve Bank of India and Securities and Exchange Board of India etc, then the registration or approval is required and to be attached with the declaration.

Further, as per sub-­section (2) of section 12.the Company must have filed with the Registrar of Companies a verification of its Registered Office as provided in E-form INC-22.

If any Companies make default in complying with the requirements of this section, then such Company shall be liable to pay penalty amounting to Rs. 50,000/- and every officer who is in default shall be liable to pay a penalty of Rs.1000/- for each day during which such default continues but not exceeding an amount of Rs.100,000/-.

The non filling of Form INC-20 A disprove all the business activities as carried out by the Company since its incorporation.

Attachments of the e-form:-

• Proof of deposit of Paid-up Share Capital;
• Necessary Board Resolution
• Registration or Approval from the Sectoral Regulator
• application for condonation of delay if required

There are two situations which are as stated below:-

• Filing of e-form within 180 days fees of the same depends upon the paid up share capital along with the proof that the subscribers has deposited the requisite amount.
• Filing of e-form after 180 days an application for condonation of delay with brief stating the reason of delay.

The Government fee for obtaining Commencement of Business Certificate is as below:

Fee for filing e-Form for companies having no share capital:

In this case, the fees applicable is only Rs 200.

Additional fee (in case the form is not filed within the time)