In this article we discussed about the ‘Declaration for commencement of business Form INC-20A’
MCA has come with New Section 10A inserted after Section 10 by Companies (Amendment) Ordinance, 2018 dated 02.11.2018 and same has been inserted in Rule 23A of the Companies (Incorporation) Rules, 2014.
According to this ordinance every Company incorporated on or after 02nd November, 2018 and having share capital is required to file e-form INC-20A with their respective Registrar of companies within 180 days from date of incorporation of company.
Section Atracts-10A of Companies Act 2013
Rule Attracts– 23A of the Companies (Incorporation) Rules, 2014,
Who needs to file the Form-Every Company incorporated on or after 02nd November, 2018) having share capital.
Time Limit– within 180 days from the date of incorporation.
What to declare– Declaration that all the subscribers to the MOA have remitted the total value of the shares agreed to be taken by them in the Companies Bank Account.
Other declarations: In case company pursuing objects requiring registration or approval from any sectoral regulators such as RBI, SEBI etc, the registration or approval, as the case may be from such regulator shall also be obtained and attached with the declaration.
What to attached:- The proof of receiving the subscription money in form of bank statement or if received in cash, attach the cash ledger. Here receiving cash amount must be check the limit allows by income tax act and others declaration as prescribed above like RBI, SEBI approvals if any.
Professional Certified by: This e-Form must be verified by a company Secretary or a chartered Accountant or a cost Accountant in practice
Penalty Provisions: Company can file such form INC-20A with Roc even after 180 days by paying additional fees as per fees rules.
Penalty On Company: the company shall be liable to a penalty of fifty thousand rupees. Penalty on Officer in Default: 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.
Power of ROC: If form not been filled within prescribed time period the Registrar may initiate action for the removal of the name of Company, on the grounds that company not carrying any business or operations.
Consequence if form is not filed within time:
Company cannot borrow money.
Company cannot start business
Important Practical Points related to this Form
1. No company can take any borrowings, raise any fund, do any agreement; make investment before filling form INC-20A, means not start any business activity.
2. Without filling INC-20A, company can change the directorship if the event held within 180 days from the date of incorporation but can’t do the same after lapse of 180 days of incorporation and can’t filled form DIR-12, in this regards the authority prospective that the company not start any business activity has not allowed to change the directorship.
3. Due to non filling form INC-20A, within 180 days or after 180 days from the date of incorporation, it is not allow the company to fill Form SH-7, MGT-14, charge related forms or any annual filling forms.
4. But it is noted that company can be strike off voluntary by filling form STK-2 who has not filed INC-20A within 180 days of incorporation.
After a period of 180 days of incorporation, filing of form INC-20A is allowed to be filed first. Thereafter, they can file STK-2 if they desire so by following the relevant provisions of the Act relating to Strike off procedure.
5. No company change its registered office before filling INC-20A.
6. Further there is the important point that after filling this form, no certificate has been generated by the authority. Only payment receipt is the proof of submitting the Form, further we can also check by view public documents on MCA the status of this Form.
7. At a conclusion we can say that this form is just a declaration made by the company to respective ROC that company have received the subscription money from the shareholders and take necessary approvals i.e RBI, SEBI if any, and now the company started its business.
Author Bio
One Private Limited company has not filed INC-20A within 180 days and its Indian Director has died. Bank account has not been opened and Subscription Money has to be received from foreign company. What is the appropriate solution in this regard.