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As we are aware, that Ministry of Corporate Affairs, is knee to improve Corporate Governance and Compliance on the part of the Company after successful roll out of DIR-3KYC for Directors/DIN holders, has introduced the E-Form (INC-20A) Commencement of Business Certificate under the Companies (Amendment) Ordinance 2018.
All you need to know about E-Form INC-20A:
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Occurrence of Events |
Time Lines |
| Who is required to file Form INC-20A | Companies registered in India after the commencement of the Companies (Amendment) Ordinance, 2018 and having a share capital is required to obtain commencement of business certificate before commencing any business or exercising any borrowing powers. Since The Companies (Amendment) Ordinance 2018 was introduced in November 2nd 2018, any company incorporated after 2nd November 2018 would be required to obtain Commencement of Business Certificate. |
| Time Limit for Obtaining Commencement of Business Certificate | The commencement of business certificate must be obtained within 180 days of incorporation of the company. |
| Declaration by every Director | While filing the application for commencement, each of the Directors of the company must declare that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him/her on the date of the making of such declaration. |
| Penalty to belevied on Company | Any company that does not obtain commencement of business certificate within 180 days of incorporation will be liable for payment of a penalty of Rs.50,000. |
| Penalty to be levied on Directors | Each of the Directors who have defaulted would be liable for payment of a penalty of Rs.1000 per day of default up to a maximum of Rs.1 lakh |
| Company Strike-Off | Also, after 180 days of incorporation, if the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he/she may initiate action for the removal of the name of the company from the register of companies (i.e. Company Strike-Off) |
| Compulsory Document Required | Subscribers proof of payment for value of shares i.e, Bank statement of company having all credit entries for receipt of subscription money received from all subscribers to MOA. |
| Consequences if Form is not filled within time | A company cannot start its business and also cannot Borrow Money. |
| Certification | By one Practicing Professional (i.e. Chartered accountant, Cost accountant or Company secretary.) |
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