INC 20A - Certificate of Commencement of Business
Form INC-20A was introduced via Companies (Amendment) Ordinance 2018 wherein it made all companies registered in India after the commencement of the Companies (Amendment) Ordinance, 2018 and having a share capital, mandatory to obtain commencement of business certificate before commencing any business or exercising any borrowing powers. Therefore after 02.11.2018, any company incorporated after this date would be required to obtain Commencement of Business Certificate.
It should be filed by the directors within 180 days from the date of incorporation of a company. Once the company receives a certificate of incorporation, the directors will file a declaration certificate of commencement of business. Our professionals will help you in filing FORM INC-20A.
While filing INC 20A for your company, you will need to adhere to a few procedures in accordance to the Government. TAXAJ experts will help you in the same.
It Usually takes 2 to 4 working days.
- Drafting of Documentation
- Filing of INC 20A
- Companies that want to comply to law by filing INC 20A
- Purchase the plan
- Provide details required for filing form
- Get secretarial services to draft various documents such as disclosure, resolutions, etc
- TAXAJ files INC 20A on your behalf
Proof of payment of subscribed capital (Bank statement/ NEFT / IMPS receipts)
Registration Certificate (Certificate of registration by RBI/ other regulators (applicable to NBFC)
All you need to know about INC 20A Filing with ROC
Introduction
As per the Companies (Amendment) Ordinance 2018, there is a requirement for all the companies registered on or after 2 November 2018 to file a certificate of commencement of business. Form 20A is a declaration filed by the directors within 180 days of the date of incorporation of the company. This is one of the most important compliances to follow as the penalties for non-filing is extremely high.
Companies which are not required to file Form 20A
Companies which are not required to file Form 20A
The following companies are not required to file form 20A:
- Companies incorporated before 2 November 2018 ( i.e before the commencement of the Companies ( Amendment) Ordinance, 2018).
- Companies incorporated after 2nd November 2018 without share capital.
The time period for filing Form 20A
The time period for filing Form 20A
Every company required to file form 20A shall file the same within 180 days of its incorporation.
Requirement and procedure
Requirement and procedure
A certificate of business commencement has to be obtained within 180 days from the date of incorporation and an eForm has to be filed with the concerned ROC (Registrar Of Companies) regarding the same. A declaration under section 10A from the directors has to be provided in the form of a Board Resolution in the eForm itself. In addition to this, a proof of deposit of the paid-up share capital by the subscribers also needs to be attached in the eForm. If a company pursues objects requiring registration or approval from any sectoral regulators such as The Reserve Bank of India and Securities and Exchange Board of India etc, then it shall obtain such registration or approval along with the attached declaration. The eForm has to be verified and certified by a practising professional before filing with the ROC (Registrar Of Companies).
Penalties for Default
Penalties for Default
The penalties for non-compliance are very high which has been done intentionally so as to curb out the number of shell companies incorporated. Following are the penalties for non-compliance:
- Penalty to be levied on the company: A penalty of Rs 50,000 will be levied on the company if it fails to comply with the mentioned requirement.
- Penalty to be levied on the officers: Every such officer in default shall be liable to a penalty of Rs 1,000 per day for each day during which the default continues subject to a maximum of Rs 1,00,000.
- Company strike-off: If the Registrar has reasonable grounds to believe that the company is not carrying on any business or operations even after 180 days of incorporation, the registrar may remove the name of the company from the Register of companies.
Fee for filing Form 20A
Fee for filing Form 20A
Fee for filing eForm for companies having share capital :
| Nominal Share Capital | Applicable Fees in (Rs.) |
|---|---|
| Where share capital is less than 1,00,000 | 200 |
| 1,00,000 or above but not exceeding 4,99,999 | 300 |
| 5,00,000 or above but not exceeding 24,99,999 | 400 |
| 25,00,000 or above but not exceeding 99,99,999 | 500 |
| 1,00,00,000 or above | 600 |
Fee for filing eForm 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)
| Nominal Share Capital | Applicable Fees in (Rs) |
|---|---|
| Up to 30 days | 2 times of normal fees |
| Above 30 but not exceeding 60 days | 4 times of normal fees |
| Above 60 days but not exceeding 90 days | 6 times of normal fees |
| Above 90 days but not exceeding 180 days | 10 times of normal fees |
| Above 180 days | 12 times of normal fees |
Frequently Asked Questions:
As per new section inserted after section 10 of the companies act 2013, section 10A says a company incorporated on or after 02//11/2018, having share capital shall not commence its business or exercise any borrowing powers unless a declaration is filed by the directors within 180 days from date of incorporation of company in form 20A (notified on 26/01/2019), with the Roc that ‘every subscriber to the MOA has paid the value of the shares agreed to be taken by him on the date of making of such declaration' and the contents of the said form shall be verified by a Company Secretary or a Chartered Accountant or a Cost Accountant, in practice:
*Provided that in the case of a company pursuing objects requiring registration or approval from any sectoral regulators such as the Reserve Bank of India, Securities and Exchange Board of India, etc., the registration or approval, as the case may be from such regulator shall also be obtained and attached with the declaration.
1. Is it mandatory to file form 20A?
Yes, it is mandatory to obtain certificate of Commencement of Business by filing form 20A.
2. Who shall file 'Form 20A'?
All the companies incorporated on or after 02/11/2018 and having a share capital to file form 20A.
3.Who shall not file 'Form 20A'?
Companies incorporated before 02/11/2018 Companies incorporated on or after 02/11/2018 not having share capital
4.What is the due date of filing ?
Due date for the first time filing of 'Form 20A' is within 180 days from Incorporation Date.
5.Which details required to be furnished in 'Form 20A'?
Declaration that all the subscriber to the MOA has paid the total value of the shares agreed to be taken by him.
6. What are the attachments to the form 20A?
Subscribers proof of payment for value of shares. We can attach Bank Account statement of Company having all credit entries for receipt of subscription money received from all subscribers to MOA.
7. What if Bank Statement is not available?
Valid payment proof like NEFT / IMPS receipts.
8. What are the Penalty if not Filed the form?
Company liable to pay Rs. 50,000 every officer who is in default liable to pay Rs. 1000/- per day of default upto a Maximum Rs. 1,00,000/-
9. What are the Consequence if form is not Filed within time?
Registrar may initiate action for the removal of the name of Company Company cannot borrow money Company cannot start business.
