Follow Us:

As we all know, the requirement of obtaining certificate of commencement of business was abolished earlier by ministry of corporate affairs, but the same has been called up again to streamline and authenticate the working affairs of the newly incorporated companies.

MCA vide notification  dt. 02.11.2018 brought into public domain Companies (Amendment) Ordinance, 2018 which contains provisions for the newly incorporated companies having share capital to obtain certificate of commencement within 180 days of incorporation.

Afterwards, w.e.f. 18.12.2018 – Companies (Incorporation) fourth amendment Rules, 2018 has come into force wherein after rule 23, “rule 23A has been inserted” stating that the declaration to obtain certificate of commencement of business is required to be filed in Form – INC- 20A.

However MCA vide notification  dt- 12.01.2019, stated that Companies (Amendment) Ordinance, 2018 will cease to operate on 21st of January, 2019 and COMPANIES (AMENDMENT) ORDINANCE, 2019 shall be deemed to have come into force on the 2nd of November, 2018.

> Hence, Companies incorporated after 2ndof November, 2018 and having share capital shall file e-form – INC-20A to obtain certificate of commencement of business, within a period of 180 days from the date of incorporation.

Note: – MCA has released the e-form – INC- 20A (Declaration for commencement of business) on 26th of January, 2019 and is available for filing purpose on MCA portal.

> A brief of the amended section is as below:-

After section 10 of the principal act, the following shall be inserted namely-

“10A(1) A company incorporated after commencement of the companies (amendment) ordinance, 2019 and having share capital shall not commence any business or exercise any borrowing powers unless-

(a) a declaration 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 a 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.*

* Discussed in the last paragraphs of the article

Who is required to file INC-20A?

Every company incorporated after commencement of COMPANIES (AMENDMENT) ORDINANCE, 2019 i.e. on and after 02nd of November, 2018 and having share capital shall file e-form INC-20A, within a period of 180 days from the date of incorporation.

> Brief description of e-form – INC-20A

Following is the brief of e-form – INC-20A, information to be filled in, documents to be attached with the form and certification of the form-

1) Enter your corporate identity number (CIN) and prefill the data.

2) Select the option “Yes” or “No”, whether your company is regulated by any sectoral regulator (like RBI in case of NBFC activities or SBI).

3) Attachments: – (a) Proof of payment for value of shares subscribed by all the subscribers – You can attach the copy of bank statement showing the entries of amount deposited by the subscribers in the company’s bank account, in respect of shares subscribed by all the subscribers.

(b) Certificate of Registration issued by the RBI (Only in case of Non-Banking Financial Companies) / from other regulators – Copy of registration issued by RBI or Other regulator, if you have selected “Yes” in point no-2.

4) Enter the resolution no. and date of board meeting in which such resolution is passed.

5) Enter the DIN of the director, making declaration in the form.

6) Certification by professional: – E-form INC-20A shall require to be certified by Practicing CHARTERED ACCOUNTANT (CA) OR Practicing COMPANY SECRETARY (CS) OR Practicing COST ACCOUNTANT (CMA).

Once the DSC of one of the director is affixed and form is certified by practicing CA, CS or CMA the form shall be pre-scrutinized for successful submission.

MCA Fees for filing E-form – INC-20A

(i) Fee for filing e-Forms or documents in case of company have share capital 

Nominal Share Capital Fees 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) Additional Fees – In case of delay in filing e-form INC-20A

Period of delays All Forms
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

Other consequences of not filing e-form INC-20A:-

In case any default is made in complying with the above mentioned provisions then-

a) Company shall be liable to a penalty of Rs. 50,000/- and;

b) Every officer of the company shall be liable to Rs. 1,000 each day maximum of Rs. 1,00,000/-.

c) Registrar may initiate the action to strike off the name of the company from the register of companies

*Verification of registered office – sec-12(2)

Declaration in E-form INC-20A by a director, also states a point i.e. point no – 4 that “The company has filed with the registrar a verification of its registered office as provided in subsection (2) of section 12”, now the question is who is required to file this verification with the registrar of companies and by what time period?

While incorporation of company, in company incorporation form SPICE – INC-32, if you have selected option “No” in point 4(b) i.e. whether the address for correspondence is the address of registered office of the company, then you need to file verification of registered office with the registrar of companies within 30 days from the date of incorporation of the company.

Verification shall be file in e-from INC-22 within 30 days from the date of incorporation.

Attachments of E-form INC-22: –

(a) Proof of registered office – Rent Agreement/Lease agreement or Conveyance agreement

(b) Copy of Utility Bill (not older than two months) – Electricity Bill/Water Bill/Telephone Bill (any one)

(c) A proof that the Company is permitted to use the address as the registered office of the Company if the same is owned by any other entity/ Person – NOC from the owner of the premises (in case of rented premises)

(d) List of all the companies (specifying their CIN) having the same registered office address, if any

Disclaimer: The contents of this article have been prepared in accordance with the relevant provisions, and information available at the time of preparation. The views and opinions expressed in this article are those of the author and the author does not take any responsibility and cannot guarantee that no inaccuracy occurs. This article cannot be quoted without the consent of the author.

Do write for any Queries/suggestions or Questions at csvaishalijain.leo@gmail.com


Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Post by Date
July 2024