First Compliance after Company Registration
In this article, we discussed the Declaration for commencement of business Form INC-20A
MCA has inserted a New Section 10A inserted after Section 10 by the Companies (Amendment) Ordinance, 2018 dated 02.11.2018 and the same has been inserted in Rule 23A of the Companies (Incorporation) Rules, 2014.
- Governing Section: Section 10A of the Companies Act, 2013
- Governing Rule: Rule 23A of the Companies (Incorporation) Rules, 2014
Requirement of filing Form INC-20A
With reference to section 10A of the Companies Act, 2013 every Company incorporated on or after 02nd November 2018 and having a share capital is required to file a declaration within 180 days of incorporation regarding the company has received the total value of the shares subscribed by shareholders of the company.
Attachments to form: Bank statement of the company in which the subscription money is received.
Certified by: This e-Form INC-20A must be verified by a Company Secretary or a chartered Accountant or a Cost Accountant or an Advocate in practice
Penal Provisions:- Company can file such form INC-20A with Roc even after 180 days by paying additional fees.
|Delayed period||Applicable Fees in (Rs)|
|Up to 30 days||2 times of form fees|
|Above 30 but not exceeding 60 days||4 times of form fees|
|Above 60 days but not exceeding 90 days||6 times of form fees|
|Above 90 days but not exceeding 180 days||10 times of form fees|
|Above 180 days||12 times of form fees|
A penalty imposed on Company: A penalty of Rs. 50,000 will be imposed on the defaulting Company.
A penalty imposed on Officer in Default: A penalty of Rs 1,000 which can be extended to Rs 1,00,000 shall be imposed on every officer/director in default.
Power to ROC: ROC is empowered to initiate action for the removal of the name of the Company, on the grounds that the company not carrying any business or operations.
The consequence of the delayed filing of the form INC-20A:
- The company cannot borrow money.
- The company cannot start a business
Important Points related to Form INC-20A
- The company can’t take any borrowings, raise any funds, execute any agreement; or make any investment before filling the form INC-20A i.e. can’t initiate any business activity.
- Without filling INC-20A, the company can change the directorship if the event is held within 180 days from the date of incorporation but can’t do the same after the lapse of 180 days of incorporation and can’t fill the form DIR-12, in this regards the authority’s perspective that the company not start any business activity and has not allowed changing the directorship.
- Due to non-filling form INC-20A, a company is not allowed to fill Forms related to annual filings (ADT-1, MGT-7 and AOC-4), charge-related forms or any other forms.
- A Company can be struck off voluntary by filling the form STK-2 that has not filed INC-20A within 180 days of incorporation. After that, filing of form INC-20A is to be filed first and then form STK-2 can be filed for Strike off procedure.
- A Company can’t change its registered office before filling INC-20A.
- The payment receipt is the only proof of submitting the Form.
- In conclusion, it can be said that this form is just a declaration made by the company to the respective ROC that the company has received the subscription money from the shareholders and can commence its business.