AN OVERVIEW ON COMPANIES (AMENDMENT) ORDINANCE, 2018
DECLARATION BEFORE COMMENCEMENT OF BUSINESS [New Section – 10A]
“A company incorporated after commencement of the companies (amendment) ordinance, 2018, i.e 02-11-2018 and having share capital shall not commence any business or exercise any borrowing powers unless-
(a) a declaration filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in FORM INC- 20A and verified in such a 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 in FORM INC-22.
Vide MCA notification dated 18/12/2018 Companies (Incorporation) fourth amendment Rules, 2018 has come into force wherein after rule 23, “rule 23A has been inserted” stating that the declaration to obtain certificate of commencement of business is required to be filed in Form – INC- 20A.
When to Apply?
Within 180 Days of Incorporation
Who needs to apply?
Companies having share capital which are Incorporated on or after 02/11/2018.
Bank statement of company having all credit entries for receipt of subscription money received from all subscribers to MOA.
Company can’t:- Start Business activity and Exercise any borrowing power (section 10A)
Any Default -Penalty to be levied
Company – Rs. 50000
Director –Rs. 10000 Per Day up to Rs. 100000
Forms to be filed
INC 20A & INC 22 (As per Instruction Kit Form INC-22 is Not required to be filed if Registered Address is already mentioned in Company incorporation forms. )
DOCUMENTS / INFORMATION REQUIRED