INC-20A (Commencement of Business Form)

 

Form INC-20A (Commencement of Business Form)

Insertion of new section 10A

Applicability of Sections and Rules:

ü  Section 10A(1)(a) of Companies Act, 2013

ü  Rule 23A of Companies (Incorporation) Rules,

Section 10A- As per the Companies (Amendment) Ordinance 2019, 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.

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 (Copy of Bank Statement of Current Account of the Company) capital by the subscribers also needs to be attached in the eForm.

This provision is introduced in THE COMPANIES (AMENDMENT) ACT, 2019 – Notification dated 31^st July, 2019.

After section 10 of the principal Act, the following section shall be inserted, namely:—

“10A. (1) A company incorporated after the commencement of the Companies (Amendment) Act, 2019 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.”

Penalties for Non-filing of INC-20A Form:- If Company is not able to file Commencement of Business form within 180 days from the date of Incorporation shall be liable for following penalties-

Ø  Penalty to Company: Rs. 50,000.

Ø  Penalty to every officer in default: Rs. 1,000 each day till the default continues subject to max. Rs. 1 lakh.

Ø  Registrar may take initiatives to remove name of the Company from Register of Company.

Ø  Additional fees for filling the form will be attracted.

S.No.	Delayed in Filing	Applicable Fees in (Rs)
1.	Up to 30 days	2 times of normal fees
2.	Above 30 but not exceeding 60 days	4 times of normal fees
3.	Above 60 days but not exceeding 90 days	6 times of normal fees
4.	Above 90 days but not exceeding 180 days	10 times of normal fees
5.	Above 180 days	12 times of normal fees

 

Note:- Now there is no fixed penalties of Rs. 50000 for Non-Compliances of INC-20A form within prescribed time limit. It means you have to pay penalty as per above chart for delayed filing of INC-20A Form.

Chart of Normal Filing Fee of ROC:

S.No.	Nominal Share Capital	Applicable Fees in (Rs)
1.	Less than 1 Lakh	200
2.	1 Lakh – 4,99,999	300
3.	5 Lakh – 24,99,999	400
4.	25 Lakh – 99,99,999	500
5.	1 Cr. or More	600

 

Q1.  Is there any requirement of Condonation of Delay?

No, there is no requirement of Condonation of delay in this case.

Q2. Is there any Certification required from Professionals?

Yes, the Form must be certified by Practicing CS/CWA/CA

Q3. Is there any attachment required to annex with Form INC-20A?

Yes, there should be attaching a copy of Poof of subscription amount received by the Company. (Generally Bank Statement of Company)

Q4. Is INC-20A is mandatory for the Company not having share capital?  

No, if a Company having share capital only need to file INC-20A form within 180 days from the date of Incorporation.

Q5. Can a Company File this Form INC-20A after due date (after 180 days)?

Yes, Can file with additional fee which is prescribed in above chart.

 

We have enclosed here a copy of challan for the Form INC-20A which is generate after due date (after 180 days from the date of Incorporation of PVT LTD Company)

 

Author:- Author of this Article is CS Vinay Pandey

About CS Vinay Pandey:-  CS Vinay Pandey is Associate Member of Institute of Company Secretaries of India and Law Graduate from VBSPU, Jaunpur.  He is Co-Founder of Professional Study Point and faculty of Financial Management Paper of CS Professional Programme.

CS Vinay Pandey

(Company Secretary & Writer)

(CS, LLB, B.Com)

cs.vinaypandey@gmail.com  

Mob/Whatsapp: 9911473074

 

Disclaimer: The content of this article is intended to provide a general guide to the subject matter and that the same shall not be treated as legal advice. For any queries, the author can be reached at cs.vinaypandey@gmail.com