Declaration for Commencement of Business
e-Form INC-20A is required to be filed Pursuant to Section 10A(1)(a) of the Companies Act, 2013 and Rule 23A of the Companies (Incorporation) Rules, 2014 for the purpose of Declaration for Commencement of Business.
Section 10A: COMMENCEMENT OF BUSINESS etc.
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-
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.
Further Section 10A(2) and (3) provides for the consequences of not filing the FORM INC-20A which is analyzed here in this article.
1. Penalty for not filing
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.
2. Consequence for not filing declaration
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 penalty for not filing as stated above, initiate action for the removal of the name of the company from the register of companies.