The Ministry of Corporate Affairs has re-introduced the compliance of Commencement of Business. In Accordance with the provision of newly inserted Section 10A(1)(a) of the Companies Act, 2013 and Rule 23A of the Companies (Incorporation) Rules, 2014, a company who registered on or after 2nd November, 2018, shall have intimate to Registrar of Companies regarding the commencement of his business within 180 days from its incorporation.
To whom applicable:-
Companies registered on or after 2nd November, 2018 shall liable to file e Form INC 20A within 180 days from registration of company. Without filing this form company cannot commence its business operations further.
Penalty Prescribed by Government for non compliance:-
• On Company:- The company shall be liable to penalty of Rs. 50,000, if not filed INC 20A within 180 days from incorporation of company.
• On Directors:– Each Director of company shall be liable to pay Rs. 1000 per days subject to maximum Rs. 1 Lack, if defaulted in filing of form.
Other Consequences for non filing INC 20A:-
• Registrar of Companies has reasonable cause to believe that company is not carrying any business activity hence liable to strike off.
• Company cannot borrow money and start its business thereafter.
Documents Required for INC 20A
Company has to provide proof that subscriber to MOA paid their contribution in the bank account of company like:-
• IMPS/NEFT payment receipt or
• Bank statement containing those entries
However it is clear if you register a company firstly you need to open a Company’s bank Account in which the subscribers to MOA shall have to submit their subscribed amount for example:- Mr. A and Mr. B registered a private Limited Company and become director cum member, took shareholding of Rs. 50,000 each of Rs. 10 Face value shares. Now Both persons have to deposit Rs. 50,000 in the Companies Bank A/c in his names.