Form 20A – Commencement of Business Certificate – 2019
eForm INC-20A is required to be filed pursuant to Pursuant to Section 10A(1)(a) of the Companies Act, 2013 and Rule 23A of the Companies (Incorporation) Rules, 2014, which are reproduced for your reference.
Legal Extract :
(1) A company incorporated after the commencement of the Companies (Amendment) Ordinance, 2018 and having a share capital shall not commence any business or exercise any borrowing powers unless—
(a) a declaration is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in such form and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration; and
(b) The company has filed with the Registrar a verification of its registered office as provided in sub-section (2) of section 12.
(2) If any default is made in complying with the requirements of this section, the company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees.
(3) Where no declaration has been filed with the Registrar under clause (a) of sub-section (1) within a period of one hundred and eighty days of the date of incorporation of the company and the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may, without prejudice to the provisions of sub-section (2), initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.]
Rule 23A: Declaration at the time of commencement of business.-
The declaration under section 10A by a director shall be in Form No, lNC-20A and shall be filed as provided in the Companies (Registration Offices and Fees) Rules, 2014 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.
All companies incorporated on or after 02//11/2018, i.e. after the commencement of the Companies (Amendment) Ordinance,  are required to file form INC-20A within 180 days of their incorporation.
What is the Purpose of this E-Form
This E Form is a declaration prior to the commencement of business or exercising borrowing powers.
What is the ROC Fees to be charged
1. Fee for filing e-Forms or documents in case of company have share capital
|Nominal Share Capital||Fee applicable|
|Less than 1,00,000||Rupees 200|
|1,00,000 to 4,99,999||Rupees 300|
|5,00,000 to 24,99,999||Rupees 400|
|25,00,000 to 99,99,999||Rupees 500|
|1,00,00,000 or more||Rupees 600|
2. Fee for filing e-Forms or documents in case of company not have share capital
Can a Company take loan from Director before filing Form INC 20A
Section 10A(1) clearly says, that a company before commencing any business or exercising any borrowing powers, file Form INC 20A with ROC.
Exercising any borrowing powers will include loan taken from directors as well.
Thus after making a company, you cannot do any thing before filing Form INC 20A.
What if Subscription money is received in cash. Is it allowed
Provisions related to INC 20A do not restrict cash receipt of subscription money. Infact as per Companies Act, 2013, it is nowhere mentioned that subscription money should be received in Bank account of Company. Thus there is no issue if Subscription money is received in cash.
But yes we need to take care of other laws, like income tax laws that restrict receiving money in cash.
What are the attachments of e-form INC-20A
- In case Subscription money is received in bank : Copy of Bank Statement
- In case Subscription money is received in cash : Copy of Books of accounts and declaration by the subscribers of the shares that they have made payment in cash and have received shares of the company.
What is penalty of non-Compliance of this Law
The company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees in case of non compliance.
Removal of name of company from ROC register : Where Form INC 20-A is not filed and period of one hundred and eighty days has expired and Registrar has reasonable cause to believe that the company is not carrying on any business, he can initiate action for removal of name of company from ROC register
Additional fee for Late filing of INC-20A
|Period of delays||All forms|
|Up to 30 days||2 times of normal fees|
|More than 30 days and up to 60 days||4 times of normal fees|
|More than 60 days and up to 90 days||6 times of normal fees|
|More than 90 days and up to 180 days||10 times of normal fees|
|More than 180 days||12 times of normal fees|
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