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Commencement of Business: Filing Form INC-20A under the Companies Act, 2013

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Commencement of Business: Filing Form INC-20A under the Companies Act, 2013

Table of Contents
Introduction
What is Form INC-20A?
Applicability of Form INC-20A
Important Provisions of the Companies Act, 2013
Steps for Filing Form INC-20A
Prerequisites of E-Form INC-20A
Documents Required for Form INC-20A
Government Fees for Form INC-20A
Form INC 20 A late filing fees
Consequences of Non-Filing
Exemptions from Filing
Conclusion
INC-20A Instruction Kit
Disclaimer

Introduction:

  • The Ministry of Corporate Affairs (MCA) introduced Form INC-20A, which is mandatory for newly incorporated companies to declare the commencement of business.
  • This requirement is under Section 10A of the Companies Act, 2013, and is a critical step for companies intending to commence their operations legally in India.

What is Form INC-20A?
Form INC-20A is a declaration filed by directors of a company confirming that the subscribers to the memorandum have paid the value of shares agreed to be taken by them. This filing is a prerequisite for companies to start any business activity.

Applicability of Form INC-20A:
The filing of Form INC-20A is mandatory for:

  • All companies incorporated on or after November 2, 2018.
  • Private limited companies, public limited companies, and One Person Companies (OPC).

Government Fees for Form INC-20A (Commencement of Business Certificate):

Nominal Share Capital

Applicable Fees in (Rs.)
Where share capital is less than 1,00,000 200
1,00,000 or above but not exceeding 4,99,999 300
5,00,000 or above but not exceeding 24,99,999 400
25,00,000 or above but not exceeding 99,99,999 500
1,00,00,000 or above 600

Form INC 20 A late filing fees (Commencement of Business Certificate):
Additional Fees in case of delay in filing of form

Period of Delay 

Late Fees
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

Consequences of Non-Filing:
Non-filing of Form INC-20A within the stipulated time can lead to the following:

  • Penalty of ₹50,000 for the company.
  • A penalty of ₹1,000 per day for directors, up to a maximum of ₹1,00,000.
  • The Registrar may strike off the company’s name from the register of companies.
  • Inability to commence business or borrow money.

Exemptions from Filing:

  • Companies incorporated for charitable purposes under Section 8 are exempted.
  • Companies that have not received share capital are also exempt from this requirement.

Conclusion:
Filing Form INC-20A is a crucial compliance requirement for new companies. Adhering to this mandate ensures that the company can commence business operations without legal hindrance. Non-compliance can result in severe penalties and operational restrictions. Companies should prioritize this filing to avoid any legal complications.

INC-20A Instruction Kit:

Source: https://www.mca.gov.in/content/dam/mca-aem-forms/instructionkits/Instruction%20Kit_INC-20A.pdf (Click)

Disclaimer
The content of this post does not constitute professional or legal advice. We disclaim any liability for damages arising from your reliance on the content provided herein. It is recommended to seek legal advice from a qualified professional in your jurisdiction for any specific legal concerns.
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