E-Form INC-20A is needed to be filed Pursuant to Section 10A (1) (a) of the Companies Act, 2013 and Rule 23A of the Companies (Incorporation) Rules, 2014 for the purpose of Declaration for Commencement of Business.
Commencement of Business – Section 10A
A company incorporated after the commencement of the Companies (Amendment) Ordinance, 2018 and having a share capital will not commence any business or exercise any borrowing powers unless-
- a declaration is filed by a director within a period of 180 days of the date of incorporation of the company in e-form INC 20A, duly verified by director & certified by practicing professional, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him/her on the date of making of such declaration; and
- The company has filed with the Registrar a verification of their registered office as provided in sub-section (2) of section 12 (which is INC-22).
Declaration at the Time of Commencement of Business- Rule 23A
The declaration made under section 10A by a director shall be in Form lNC-20A and will be embay as provided in the Companies (Registration Offices & Fees) Rules, 2014 and the contents of the said form shall be verified by a CS (company Secretary )or a CA (chartered Accountant) or a cost Accountant in practice.
Further Section 10A (2) & (3) provides for the consequences of not filing the FORM INC-20A which we will analyzed here in this article.
1. Penalty for not filing
If any default is made in complying with the requirements of this section, the company shall be liable to a penalty of INR 50 thousands and every officer who is in default shall be liable to a penalty of INR 1 thousand for each day during which such default continues but not exceeding an amount of INR 1 lacs.
2. Consequence for not filing declaration
Where no declaration has been made with the Registrar under clause (a) of sub-section (1) within a period of 180 days of the date of incorporation of the company and the Registrar has reasonable reason to believe that the company is not carrying on any business or operations, he/she may, without prejudice to the provisions of penalty for not filing as mention above, initiate action for the removal of the name of the company from the register of companies.