The newly rolled out and most discussed among the corporate is Form INC 20A. Those Companies registered in India after the commencement of the Companies (Amendment) Ordinance, 2018 and having share capital is required to obtain the commencement of business certificate before commencing any business or exercising any borrowing powers. One can say that the Ministry has reintroduced the concept of Commencement of Business Certificate via Form INC-20A on MCA.
Form INC 20 A
Form 20A is a declaration that needs to be filed by the directors of the company at the time of the commencement of the business. It should be verified by a Chartered Accountant (CA) or Company Secretary (CS) or a Cost Accountant in practice.
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Who should file form INC 20A?
On the 2nd of November, 2018 the Companies (Amendment) Ordinance 2018 was introduced, hence any company incorporated after this date will be required to file Form INC-20A. within 180 days from the date of incorporation of the company.
Documents required for Form INC 20A
1. Corporate Identification Number of the Company
2. Name of the Company
3. Address of Registered Office
4. Email address of Company
5. Attachments
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- Subscribers Proof of payment for value of shares
- Certificate of Registration issued by RBI or other Regulators (in case the company is regulated by a sectoral regulator)
- Other Attachments, if any
Charges for Form INC 20A
Fee for filing eForm for companies having share capital:
| Nominal Share Capital | Applicable Fees in (Rs.) |
| Less than 1,00,000 (USD 1209.45) | 200 (USD 2.42) |
| 1,00,000 to 4,99,999 (USD1209.45to 6047.23) | 300 (USD 3.63) |
| 5,00,000 to 24,99,999 (USD6047.24to 30236.19) | 400 (USD 4.84) |
| 25,00,000 to 99,99,999 (USD 30236.20to 120944.78) | 500 (USD 6.05) |
| 1,00,00,000 or more (USD 120944.79or more) | 600 (USD 7.26) |
Fee for filing eForm for companies having no share capital:
| Applicable Fees in (Rs.) |
| 200 (USD 2.42) |
Additional fee (in case the form is not filed within the time)
| Nominal Share Capital | Applicable 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 |
What are the Penalties for non filing of Form INC 20 A?
- Company will be liable to pay Rs.50,000 (USD 604.72) penalty for not filing the Form INC 20A
- Every officer who is in default is liable to pay Rs.1000per day (USD12.09)of default upto a Maximum Rs.1,00,000 (USD 1209.45)
- Registrar may initiate action for the removal of the name of Company / Strike off company name
Consequences of non-filing of Form-INC-20A may create hindrance for companies to start their business and also while borrowing of money. The company would be liable to a Penalty for late filing the Form INC-20A.
Conclusion
A newly incorporated company can commence business once the subscribers to MoA (Memorandum of association) have deposited the subscription amount with the Company. E form(INC-20A) is required for every company giving declaration through this e form for commencement of business without filling this e form company can’t start the business. Such amount shall be deposited within 180 days of incorporation. A proof of such deposit (Bank Statement) is to be filed with INC-20A.
Note: The conversion rate for 1 USD = INR 80 as assumed in this article.
Reference
- https://www.mca.gov.in/
- https://learn.quicko.com/certificate-of-commencement-of-business
- https://taxguru.in/company-law/form-inc-20a-declaration-commencement-business.html
Author Bio
this SITE IS VERY HELPFUL
WHETHER SECTION 8 COMPANY LIMITED BY GUARANTEE IS REQUIRED TO FILE FORM 20A ON MCA PORTAL