Form INC-20A – Commencement of Business

DECLARATION FOR COMMENCEMENT OF BUSINESS

Form INC 20A was introduced under Rule 10A read with Rule 23A of the Companies (Incorporation) Rules, 2014 of the Companies Act 2013 for the purpose of declaration of the commencement of the business. This form plays a critical role for all the Companies incorporated under the Companies Act, 2013 as any Company incorporated after the Commencement of this rule (i.e., after 02-11-2018) should not be allowed to carry on any business activities prior filing this respective form of Declaration.

APPLICABILITY:

This form is applicable on the following:

1. A company incorporated on or after the commencement of the Companies (Amendment) Ordinance, 2018, i.e., on or after 2^nd November 2018.

2. Company having a share capital, incorporated on or after 2^nd November 2018.

ABOUT INC-20A:

It is a declaration which is required to be filed by a director of a Company within a period of 180 days from the date of incorporation of the Company to the Registrar of Companies.

The purpose of this declaration is to verify that every subscriber to the Memorandum has paid up the value of the shares agreed to be taken by them on the date of making of such declaration.

VERIFICATION:

The contents of the said form shall be verified by a Company Secretary or a Chartered Accountant or a Cost Accountant in practice.

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.

ATTACHMENTS TO E-FORM INC-20A:

1. Bank statement showing the subscription amount received by the company.

2. Photograph of the Registered Office showing the external building and inside office also showing therein at least one Director/ KMP.

PENALTY FOR NON-COMPLIANCE:

The following penalty is attracted where the Company fails to provide declaration in the prescribed form:

1. Penalty Levied on the Company: The company shall be liable to a penalty of INR 50,000.

2. Penalty Levied on the Directors: Every Director who is in default shall be liable to a penalty of INR 1,000 for each day during which such default continues but not exceeding an amount of INR 1,00,000/-.

3. Also, after 180 days of incorporation, if the declaration is not filed in form INC-20A with the Registrar and the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may initiate the action for the removal of the name of the company from the register of companies.

FEES TO BE CHARGED:

• In case company is having share capital:

• Additional Fees in case of delay in filing of form:

Conclusion: Form INC-20A is the first step and is regarded as the critical element after the successful incorporation of the Company under the provisions of the Companies Act 2013.The said e-form INC-20A is available on the website of Ministry of Corporate Affairs (MCA) which can be assessed and filed after logging in to MCA (V3).

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Disclaimer: The entire contents of this editorial have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, users of this information are expected to refer to the relevant existing provisions of applicable Laws. In no event the author shall be liable for damages resulting from the use of the information. This shall not be treated as solicitation in any manner or for any other purposes whatsoever.

The author of this editorial is the founder of AAKRITI GUPTA & ASSOCIATES (Practicing Company Secretary) firm based in Noida and can be reached out at [email protected].