FORM INC-20A: DECLARATION FOR THE COMMENCEMENT OF BUSINESS ON V3 PORTAL
As per the Companies (Amendment) Ordinance 2018, there is a requirement for all the companies registered on or after 2 November 2018 to file a certificate of commencement of business. Form 20A is a declaration filed by the directors within 180 days of the date of incorporation of the company. This is one of the most important compliances to follow as the penalties for non-filing are extremely high.
Purpose of Form INC-20A:
To inform the ROC that subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of filing of this form.
The company has filed with the registrar the Form INC 22 for verification of its registered office
To inform the Registrar that any approval from sectoral regulator like RBI, SEBI etc has been obtained
Companies which are not required to file Form 20A
The following companies are not required to file form 20A:
- Companies incorporated before 2 November 2018 ( i.e before the commencement of the Companies ( Amendment) Ordinance, 2018).
- Companies incorporated after 2nd November 2018 without share capital.
The Time period for filing Form 20A
Every company required to file form 20A shall file the same within 180 days of its incorporation.
What to declare?
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 Other declarations?
In case company pursuing objects requiring registration or approval from any sectoral regulators such as RBI, SEBI etc, the registration or approval, as the case may be from such regulator shall also be obtained and attached with the declaration.
What to attach?
The proof of receiving the subscription money in form of bank statement or if received in cash, attach the cash ledger. Here receiving cash amount must be check the limit allows by income tax act and others declaration as prescribed above like RBI, SEBI approvals if any.
Requirements and procedure
- A certificate of business commencement has to be obtained within 180 days from the date of incorporation and an eForm has to be filed with the concerned ROC (Registrar Of Companies) regarding the same.
- A declaration under section 10A from the directors has to be provided in the form of a Board Resolution in the eForm itself. In addition to this, a proof of deposit of the paid-up share capital by the subscribers also needs to be attached in the eForm.
- If a company pursues objects requiring registration or approval from any sectoral regulators such as The Reserve Bank of India and Securities and Exchange Board of India etc, then it shall obtain such registration or approval along with the attached declaration.
- The eForm has to be verified and certified by a practising professional before filing with the ROC (Registrar Of Companies).
Penalties for Default
The penalties for non-compliance are very high which has been done intentionally so as to curb out the number of shell companies incorporated. Following are the penalties for non-compliance:
- Penalty to be levied on the company: A penalty of Rs 50,000 will be levied on the company if it fails to comply with the mentioned requirement.
- Penalty to be levied on the officers: Every such officer in default shall be liable to a penalty of Rs 1,000 per day for each day during which the default continues subject to a maximum of Rs 1,00,000.
- Company strike-off: If the Registrar has reasonable grounds to believe that the company is not carrying on any business or operations even after 180 days of incorporation, the registrar may remove the name of the company from the Register of companies.
Power of registrar in case of failure:
Where no declaration has been filed 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 initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.
Attachment Photograph of Registered Office showing external building and inside office also showing therein at least one Director/ KMP The proof of receiving the subscription money in the form of bank statement. On MCA v3 portal Name of the shareholder, name of the bank with IFSC code, Account number, date of receipt and amount id required to be filled
Certification by Professional:
This e-Form must be verified by
- A chartered Accountant in practice
- A company Secretary in practice
- A cost Accountant in practice.