pri Consequences of Not Filing a Declaration for Commencement of Business in e-Form INC-20A Consequences of Not Filing a Declaration for Commencement of Business in e-Form INC-20A

Declaration for Commencement of Business

Form INC-20A:

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-

  • 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 e-form INC 20A, duly verified by director and certified by practicing professional, 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
  • The company has filed with the Registrar a verification of its registered office as provided in sub-section (2) of section 12 (i.e., INC-22).

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.

Author Bio

Qualification: CS
Company: Malkit Singh & Associates
Location: New Delhi, Delhi, India
Member Since: 14 Mar 2021 | Total Posts: 5
Practicing Company Secretary & a member of Institute of Company Secretaries of India. He has also obtained degree in Bachelor of Commerce (B.CoM) and also Registered as a GST Practitioner. View Full Profile

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2 Comments

    1. CS Malkit Singh says:

      As per MCA Circular No. 06/2021, if the due date of filing the Form INC-20A falls within 1st April, 2021 to 31st May 2021 then it can be filed by 31st July, 2021.

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