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COMMENCEMENT CERTIFICATE (FORM 20A)

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:

  1. The Company has to pay a penalty of Rs. 50,000/-
  2. 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)
  3. 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:

  1. Have registered and incorporated before the 2nd of November, 2018.
  2. 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.

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FAQ - Frequently asked questions

What is the Time limit for obtaining Commencement of Business Certificate?

The commencement of business certificate must be obtained within 180 days of incorporation of the company.


What is the penalty for the non-filing of form INC – 20A?

Any company which have not obtained the commencement of business certificate within 180 days of incorporation, it will be liable for payment of a penalty of Rs. 50,000/-. Each of the Directors who have defaulted would be liable for payment of a penalty of Rs.1,000/- per day of default up to a maximum of Rs.1 lakh.


What are the consequences for non-filing of form INC – 20A?

The company shall be liable to a penalty of Rs 50,000/- and every officer who is in default shall be liable to a penalty of Rs 1000/- for each day during which such default continues but not exceeding Rs 1,00,000/-. If Registrar has reasonable cause to believe that the company is not carrying on any business or operations, may initiate action for the removal of the name of the company from the register of companies.


What are the documents to be attached while filing form INC – 20A?

The proof which subscribers have to attach while filling up the form INC 20A is the proof of payment for the value of shares. This means the Bank statement of the company having all credit entries for receipt of subscription money received from all subscribers to MOA.


Whether the form INC – 20A needs to be certified by any professional?

Yes, the form needs to be certified by either Chartered Accountant/Cost Accountant/Company Secretary


Whether the form INC – 20A needs to be certified by any professional?

Yes, the form needs to be certified by either Chartered Accountant/Cost Accountant/Company Secretary