The Ministry of Corporate Affairs has re-introduced the concept of commencement of business certificate. Under the newly introduced Companies (Amendment) Ordinance 2018, all 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 November 2018 would be required to obtain Commencement of Business Certificate.
CERTIFICATE FOR COMMENCEMENT OF BUSINESS
Under the Companies (Amendment) Ordinance, 2019, a new Section is introduced i.e. Section 10 A for Commencement of Business.
Section 10 A- COMMENCEMENT OF BUSINESS
*MANDATORY TO OBTAIN CERTIFICATE OF COMMENCEMENT OF BUSINESS FOR REGISTERED COMPANIES:*
Companies registered on or after November 02, 2018 are required to file the declaration for commencement of business with the Registar of companies
The declaration for commencement of business shall be filled within 180 days from the date of getting CERTIFICATE OF INCORPORATION.
Penalty for Not Obtaining Commencement of Business Certificate
Penalty Levied on Company
Company is liable to pay Rs 5000
Penalty Levied on Directors
Directors are liable to pay Rs 1000 per day and maximum 1 lacs after expiration of 180 days from the date of registration.
*CONSEQUENCES IF FORM IS NOT FILED WITHIN TIME-*
*FORM FILED FOR COMMENCEMENT OF BUSINESS
E-Form 20 A is required to be filed for Commencement of Business.
*Documents required for filing Form 20 A:
1. Subscribers proof of payment for value of shares- Bank Statement and Board Resolution
IN CASE OF NON BANKING FINANCIAL COMPANIES/FROM OTHER REGULATORS:
Certificate of Registration issued by the RBI
Fee for filing e-Form 20A :
i. In case of company have share capital
|Nominal Share Capital||Fee applicable|
|Less than 1,00,000||Rupees 200|
|1,00,000 to 4,99,999||Rupees 300|
|5,00,000 to 24,99,999||Rupees 400|
|25,00,000 to 99,99,999||Rupees 500|
|1,00,00,000 or more||Rupees 600|
ii. In case of company not have share capital
Additional fee after 180 days from the date of Incorporation
|Period of delays||Fees|
|Up to 30 days||2 times of normal fees|
|More than 30 days and up to 60 days||4 times of normal fees|
|More than 60 days and up to 90 days||6 times of normal fees|
|More than 90 days and up to 180 days||10 times of normal fees|
|More than 180 days||12 times of normal fees|