Compliance

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Commencement of Business

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Certificate of Commencement of Business

Mandatory for Companies Registered after 2nd November 2018

Declare the Registered Address of Company
Open a Current Bank Account of Company
Deposit Capital as Subscribed in MOA
Obtain Certificate of Commencement of Business

A company can commence its business/operations only after it files a declaration in Form No INC-20A declaring its registered address and collection of the paid-up capital in the Bank A/c of the Company. This declaration must be filed within 180 days of incorporation. Certificate of Commencement of Business Before the declaration in Form, INC-20A is filed by a company the entire subscribed share capital as shown in the MOA of the company must be deposited in the bank account of the newly registered company. A Certificate of Commencement of Business is issued with the approval of the INC-20A and until then a company can not enter into any business activity, what so ever. The maximum time prescribed for filing of INC-20A is 180 days from the date of incorporation of the company. The non-compliance has very serious effects on the company and it may be punishable with a fine of Rs. 50,000 and every officer in default is punishable with a fine of Rs. 1000/- per day for each day of default, however, the maximum punishment cannot be more than Rs. 1,00,000/- The company shall be closed if the Certificate of Commencement of Business is not Filed.

Frequently Asked Questions

What is e-form INC-20A?

The form INC-20A is the prescribed eform through which a company has to file a declaration before commencing the business operations of the company. This form has been notified on 25th January 2019, however, is applicable on all companies which have been incorporated on or after 2nd November 2018.

What is the time limit for filing the eform INC-20A?

The Form INC-20A must be filed immediately after incorporation of the company as the company shall not be able to start any business activity as such. However, the last date of filing the same is fixed at 180 days from the date on which company got registered.

Is there any government fee payable for filing the Form INC-20A?

Yes, the general fee as prescribed under the rules are also applicable for filing the form INC-20A and the fee is based on the authorized capital of the company. Below is the list of the filing fee for the declaration for the certificate of commencement of business.

Can I file the Form INC-20A even when I miss the deadline of 180 Days?

Yes, you have the option of filing the form INC-20A even if the due date is missed, however with an additional fee to be paid based on the delay of the number of days from the due date. Below table is for reference to calculate additional fee.

What is the penalty of non-filing?

The non-filing is punishable with a fine of Rs 50,000/- to be paid by the company and every officer in default which includes director is to pay Rs. 1000 for each day of non-compliance. However, the penalty shall not be more than Rs. 1,00,000/- for directors.

Why companies need to file eform INC-20A?

To file form INC-20A you need to attach a certified copy of the Bank Statement of the company where the paid-up capital has been received from the first subscribers of the MOA/Shareholders.

Mandatory Compliances of a Newly Registered Company

Intimation of Registered Address to ROC

Nowadays a company may be incorporated on a Communication Address also. Check if your company was incorporated like that. In other words, if you have not intimated the registered address, do it within 30 days of incorporation by filing a Form INC -22
Commencement of Business

After Incorporation of Company, every subscriber to the MOA (Promoter Shareholder) must remit their part of paid-up capital to the Current Bank Account of the Company. Then file a declaration in Form 20A to obtain the Certificate of Commencement of Business.
Share Certificate & Franking

The Share Certificate to the subscribers of the MOA needs to be issued within 60 days of incorporation and stamp duty of appropriate value must be paid to the concerned state government. The process of stamp duty payment is also known as the Franking of Share Certificate.
First Auditor Appointment

The dramatic work is also a kind of literary work which includes any piece for recitation, or an arrangement of performing a play, work of choreographing or dumb show entertainment, a scenic arrangement or the work of acting based on a fixed writing work. but does not include a cinematograph film.
Shops & Establishment Registration

In India, every state government has passed a Law to regulate working hours and conditions of employment for the private sector. A company has to register itself as an employer within 30 of its incorporation as a Company.
Professional Tax Registration

The tax on employment or profession is imposed by the majority of the state government. If the company has its office or employs staff in a state where the PT is applicable. You need to register for it within 30 Days.

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