COMMENCEMENT OF BUSINESS FILING
- For any company established on or post 2 November 2018 in India, it is mandatory to file a formal declaration to the Registrar of Companies.
- This formal declaration should be duly filled in the Form INC-20A, and sent to the Registrar of Companies within 180 days of the establishment of the Company.
Companies that are not obligated to file Form 20A
- Companies established prior to 2 November 2018 ( i.e prior to the passing of the 2018 Companies Ordinance).
- Companies established post 2nd November 2018 and not possessing any share capital.
Processes at a glance for the declaration of commencement of the business
- Obtain Commencement of Business Certificate in a span of 180 days from the date of establishment of the company.
- An eForm should be duly filled and submitted to the ROC (Registrar Of Companies) for the same.
- Pursuant to section 10A, a declaration shall also be made by the directors of the company in the eForm itself.
- Apart from this, the document corroborating the deposit of the sum of capital received from the shareholders should be attached with the form.
- It is also mandatory that the eForm has must be certified and validated via a practising professional prior to filing it to the Registrar of Companies
- If a company carries out the business that is obligated to get formal approval from regulatory bodies like the Securities and Exchange Board of India, Insurance
- Regulatory and Development Authority, The Reserve Bank of India etc., then it shall also get such approval apart from the mere declaration.
Penalties for non-compliance
Penalty on the company: If the company does not comply with the above condition, it will be fined ?50,000.
Penalty on the officers: Each such officer who is in non-compliance shall be subject to a penalty of ?1,000/day till the default persists, with a maximum penalty of ?1,00,000.
Removal from this list: If the Registrar has considerable reasons to believe that the firm is not engaged in carrying out business or commercial operations post 180 days of its establishment, the Registrar, through his discretion, has the right to remove the company's name from the list of Register of Companies
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