Ministry of Corporate Affairs has Introduced E-From INC-20A (Declaration of Commencement of Business), in compliance with the provisions of section 10A(1)(a) of the Companies Act, 2013 and Rule 23A of the Companies (Incorporation) Rules 2014.
As per the new provisions of the said section Every company which has been incorporated or will be incorporated on or after 02/11/2018, having share capital shall not commence its business or exercise any borrowing powers unless it files a declaration with the registrar of companies that ‘Every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of such declaration’ in Form INC-20A, within a period of 180 days from the incorporation of the company.
The contents of the said form is to be verified by a Company Secretary or Chartered Accountant in practice.
Further it is to be noted here that, in case a company pursuing object requires any approval from any regulatory authority like Rerserve Bank of India or SEBI or IRDAI, the same should be obtained and attached to the e form-20A.
Who is liable to comply with the provisions of this section?
Following classes of companies are required to comply with the provisions of this section:
- Companies incorporated on or after 02/11/2018
- and having share capital
What is the due date of filing Form INC-20A
180 days from the date of incorporation of the company
What are the documents which need to be attached to form INC-20A
Bank statement showing the credit entries of the money received from the subscriber.
Penal provisions for not compying with the provisons?
- Company will be liable to pay a penalty of Rs. 50,000/-
- Every officer of the company in default will be liable to pay an amount equal to Rs. 1000 for every day of default with a maximum of Rs. 1,00,000/-
Consequences of not filing the form Inc-20A
- The registrar of companies can initiate the procedure for removal of the company name from the register of Companies.
- Company can not borrow any money
- Company can not start its business