Commencement of Business section 10 A of the Companies Act, 2013 is a newly inserted section by the Companies (Amendment) Second Ordinance, 2019.
This Section says that a company incorporated after the commencement of the Companies (Amendment) Ordinance, 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.
The section explains that any company incorporated after the commencement of Companies (Amendment) Ordinance, 2019 shall have to file the e-form INC-20A with the Registrar of Companies for the commencement of its business. The form contains the declaration by the director of the Company that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him and the company has filed with the Registrar a verification of its registered office as per section 12(2) of the Companies Act,2013.
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.
The e-form INC-20A (commencement of business) is required to be filed within 180 days from the date of incorporation. The e-form is need to be certified by the practising professional i.e. CA/CS/CWA.
The relevant section of the E-form is section 10A of the Companies Act,2013 and rule 23A of Companies (Incorporation) Rules, 2014.
In case the Company fails to file the e-form within the prescribed time, additional fees will be levied as follows:
| 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 |
{The author is a practicing company secretary in Delhi and can be contacted at (M) 8285417477 and (E) [email protected] }
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Hi,
Please note that the E form cannot be filed with additional fees. The matter has to be adjudicated with concerned Registrar of Companies. The adjudication order has to be filed in E form INC 28 and only then the E form INC 20 A will be active for filing.