ALL ABOUT FORM INC-20A
FORM INC-20A is a Declaration for the commencement of business is required to be filed pursuant to Section 10A(1)(a) of the Companies Act, 2013 and Rule 23A of the Companies (Incorporation) Rules, 2014.
According to the new section inserted after section 10 of the Companies Act 2013, section 10A states that a company incorporated on or after 02/08/2018, having a share capital shall not commence its business or get any borrowing powers unless a declaration is filed by the directors within 180days of Incorporation of Company in the Form INC-20A.
Extract of Section 10A of Companies Act, 2013:
(1) A company incorporated after the commencement of the Companies (Amendment) Ordinance, 2018 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 subsection (2) of section 12.
(2) If any default is made in complying with the requirements of this section, the company shall be liable to a penalty of fifty thousand rupees, and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees.
(3) Where no declaration has been filed with the Registrar under clause (a) of sub-section (1) within a period of one hundred and eighty days of the date of incorporation of the company and the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may, without prejudice to the provisions of sub-section (2), initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.]
FAQ’S ON FORM INC-20A (COMMENCEMENT OF BUSINESS CERTIFICATE):
1. Who is required to file form INC – 20A?
Ans: As per the Companies (Amendment) Ordinance, 2018, all the Companies registered in India and having a share capital is required to obtain a commencement of business certificate before commencing any business or exercising any borrowing powers. Since The Companies (Amendment) Ordinance 2018 was introduced on November 2nd, 2018 and hence any company incorporated after 2nd November 2018 would be required to obtain a Commencement of Business Certificate.
2. What is the penalty for the non-filing of form INC – 20A?
Ans: Any company which has not obtained the commencement of business certificate within 180 days of incorporation, it will be liable for payment of a penalty of Rs. 50,000/-. Each of the Directors who have defaulted would be liable for payment of a penalty of Rs.1,000/- per day of default up to a maximum of Rs.1 lakh.
3. What is the Time limit for obtaining the Commencement of Business Certificate?
Ans: The commencement of business certificate must be obtained within 180 days of incorporation of the company.
4. What are the consequences for non-filing of form INC – 20A?
Ans: After 180 days of incorporation and if the company has not filed the form INC – 20A, if the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he/she may initiate action for the removal of the name of the company from the register of companies (i.e. Company Strike-Off)
5. What are the documents to be attached while filing form INC – 20A?
Ans: Subscribers proof of payment for the value of shares i.e, Bank statement of the company having all credit entries for receipt of subscription money received from all subscribers to MOA.
6. Whether the form INC – 20A need to be certified by any professional?
Ans: Yes, the form needs to be certified. (Chartered Accountant/Cost Accountant/Company Secretary.
7. Who shall not file “Form INC 20A”?
8. What is the due date of filing form INC 20A?
The due date for the first time filing of “Form 20A”
|The company incorporated on or after 02/11/2018||From the date of incorporation within 180 days|
9. What details are required to be furnished in “Form 20A”?
A declaration that all the subscribers to the MOA have remitted the total value of the shares agreed to be taken by them in the Companies Bank Account.
♦ What are the attachments to the form 20A?
Subscribers proof of payment for the value of shares
One has to attach the Bank Account statement of the Company having all credit entries for receipt of subscription money received from all subscribers to MOA.
♦ What if Bank Statement is not available?
valid payment proof like NEFT / IMPS receipts.
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