Form 20A is a declaration which has to be filed by the directors of a Company at the time of the commencement of the business. This form should be well verified by either a CA (Chartered Accountant) or a CS (Company secretary) or a cost accountant of a firm.
A Company which is incorporated after the commencement of the ComPANies (Amendment) Ordinance, 2019, cannot practice any kind of business until and unless a declaration is filed by a director within 180 days of the date of incorporation. Thus the form 20 A is extremely important and must be done accordingly, because if not done, then the penalties for the same are extremely high.
Consequences of non-filing the FORM 20A
If the director hasn’t filed the FORM 20A, then the following penalties can be imposed on him and the Company:
- The Company has to pay a penalty of Rs. 50,000/-
- Every officer who is in default is liable to a penalty of Rs 1000/- for each day as and when the default continues (max limit 1,00,000)
- The register can remove the name of the Company from the register of comPANies if the Registrar finds that the Company is not performing any business.
Which all comPANies are exempted?
The comPANies which fulfil either of the criteria, don't have to fill the FORM 20A. These are mentioned as below:
- Have registered and incorporated before the 2nd of November, 2018.
- If the Company which is incorporated after 2nd November 2018, does not hold a share capital.
Time Limit for Obtaining Commencement of Business Certificate
Within a time sPAN of 6 months or 180 days of incorporation, the Commencement Certificate of Business must be obtained by the firm. As you fill the application form of the commencement certificate, every Director must declare that every subscriber to the memorandum has paid the value of the shares agreed to be taken. The fees for the E-form of commencement certificate ranges from Rs. 200 to Rs.600.