Commencement of Business (INC-20A

Certificate of Commencement of Business

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GA 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 after which the Certificate of Commencement of Business is issued.

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    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.

    Points to Note about Filing of Form Number INC-20A

    Applicability On Companies

    The MCA has notified the new provision on 26th January 2019 which shall have retrospective effect to all companies incorporated on or after 2nd November 2018. Hence every applicable company must take steps to file INC-20A ASAP.

    No Activity until approval of INC-20A

    A company must not enter into any transaction or business activity before approval of INC-20A. In other words, any agreement, sale, purchase without the issue of the certificate of commencement of business shall be an illegal activity.

    Deposit of Capital from Promoters

    The share capital amount must be deposited in the company bank A/c through Banking Channels only. However, it may be deposited in parts but the aggregate transfer should exactly match with the paid-up capital.

    File Declaration in Form INC-20A

    The company must check if the registered address has been reported to ROC at the time of incorporation or not and obtain Bank Statement of Company Showing transaction pertaining to capital. Now file INC-20A with DSC.

    Who should register for GST?

    (All Inclusive)

    Commencement of Business
    999.00 /

    (All-Inclusive Govt. Fees)
    (*Government fees is included in the above-mentioned amount)

    Process of obtaining Certificate of Commencement of Business

    Open Current Bank Account

    Every company has to open a Bank Account, and as per Indian regulations, the opening of Bank A/c is the first step and must be taken before starting any business activity.

    Collect Share Subscription Money

    The Company need to make arrangements for collection of paidup capital from the first subscribers of the company. The last page of MOA contains the List of first subscriber / shareholder and the amount subscribed by them.

    Deposit Share Capital in Company bank

    The share capital collected from the first subscribers are then deposited into the Company bank A/c. Before filing the declaration, the company must obtain a Certified Copy of Bank Statement showing the capital

    Filing of Form INC-20A

    The declaration for the commencement of business is to be filed in the eform INC-20A which is digitally signed by any one director of the company and further certified by a practising CA, CS, or CMA.

    Frequently Asked Questions

    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.

    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.

    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 authorised capital of the company. Below is the list of the filing fee for the declaration for the certificate of commencement of business.

    SI. No Authorised Capital (INR) INR
    1. Less than 1,00,000 200
    2. 1,00,000 to 4,99,999 300
    3. 5,00,000 to 24,99,999 400
    4. 25,00,000 to 99,99,999 500
    5. 1,00,00,000 or more 600

    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.

    Sl. No Delay Additional Fee as times of Normal filing fee
    1. Delay up to 30 Days 2 Times
    2. More than 30 days and up to 60 days 4 Times
    3. More than 60 days and up to 90 days 6 Times
    4. More than 90 days and up to 180 days 10 Times
    5. More than 180 days 12 Times

    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.

    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.

    No, an unregistered person without GSTIN cannot collect GST from customers or claim an input tax credit of GST paid.

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