As per Sec 10A of  Companies Act, 2013

(1) A company incorporated after the commencement of the Companies (Amendment) Ordinance, 2019 and having a share capital shall not commence any business or exercise any borrowing powers unless—

(a) a declaration is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in such form and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration; and

(b) The company has filed with the Registrar a verification of its registered office as provided in sub-­section (2) of section 12.

Applicable to Companies incorporated on or after 02/11/2018
Due date for filing Within 180 days of Incorporation
Form to be filed INC – 20A
Attachments Required Subscribers proof of payment for value of shares (Bank statement of company having all credit entries for receipt of subscription money received from all subscribers to MOA may be deemed fit)
Non Compliance of filing 1. If the register has a reasonable cause to believe the company is not carrying on any business or operation, Remove of name of the company from register of companies.

2. Cannot Start Business activity and Exercise any borrowing power (section 10A)

Any default Penalty :

Company : 50,000 Rs and

Every officer who is default : 1,000 for per day upto 1,00,000 Rs.

Fees for filing INC – 20A 200 Rs/-
Additional Fees for delay in filing

delay Upto  30 days

> 30 < 60 days

> 60 < 90 days

> 90 < 180 days

> 180 days

Fees to be payable

2*Normal fees

4*Normal fees

6*Normal fees

10*normal fees

12*normal fees

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    Dear Sir,

    I have a question that if the company has received the share capital within 60 days of incorporation but has not filed INC 20A can it enter in to transaction like receipt and payment of funds from the bank account.

  2. Lovely Verma says:

    If the company receive subscription money after 180 days from the date of it’s incorporation and the company did not commence the business yet , is the Company in default and it;s officer ?
    if yes, then they need to pay the penalty?
    If no, then only additional fee is need to pay?

    1. Shyam S Singhvi says:

      Intention of the legislature is to levy penalty u/s 10(2) in the event of commencement of business or exercising of borrowing powers before filing declaration to the effect that the subscribers has paid the agreed amount of shares in the memorandum before 180 days of the incorporation of the company.
      Thus, penalty is attracted in the event of commencement of business or exercising of borrowing powers before compliance u/s 10A(a), thus no penalty can be levied.
      It appears that penal provision has some lapses.

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March 2021