INC-20A: Declaration for Commencement of Business- Applicability, Time limits and Penalties
Whenever a new company is incorporated, the subscribers to the Memorandum of Association subscribes to paid up capital of the company. It is therefore, expected that such subscribers will introduce necessary capital in the bank account of the company so that the activities of the company could be commenced. To ensure this, Form INC 20A was introduced under Rule 10A read with Rule 23A of the Companies (Incorporation) Rules 2014 of the Companies Act, 2013. INC 20A represents the form for declaration of the commencement of the business. A new company incorporated after the commencement of this rule (i.e. on or after 02-11-2018) shall not be allowed to carry on any business activities prior to filing of this form.
What is Form INC-20A?
Form INC 20A is a declaration to be filed by the directors of the company as regards commencement of the business activities of the company. This form is verified by a practising Chartered Accountant or practising Company Secretary or a practising Cost Accountant.
Which company is required to file Form INC 20A?
The following companies are required to file declaration in Form INC 20A:
- A company incorporated on or after the commencement of the Companies (Amendment) Ordinance, 2018 i.e. on or after 2nd November 2018 and
- A company having a share capital
In other words, if a company (with/ without share capital) is incorporated before 2nd November 2018, it is not required to file Form INC 20A. Further, if a company without share capital is incorporated on or after 2nd November 2018, it is not required to file Form INC 20A.
Time Limit for filing Form INC 20A
The declaration in Form INC 20A is required to be filed by a director of the company within a period of 180 days from the date of incorporation of the company to Registrar of Companies.
Purpose of filing Form INC 20A
As already discussed, the purpose of Filing of Form INC 20A is to ensure that all the subscribers to the Memorandum of Association have paid the amount of capital subscribed by them.
Procedure of filing Form INC 20A
Form INC 20A is to be filed with the Registrar of Company within 180 days from the date of incorporation of the company. A proof of deposit of share capital by the subscribers to MOA is to be attached along with the form. Further, the Form needs to be verified by a practising professional either a CA/CS/CMA.
Further, in case of a company pursuing objects requiring registration or approval from any sectoral regulators such as RBI/ SEBI etc., the registration or approval from such regulator shall also be obtained and attached with the Form INC 20A.
What are the attachments to Form INC 20A?
Following needs to be attached to E-Form INC 20A:
- Bank Statement (as a proof) showing the subscription amount received by the company from the subscribers
- Photograph of the Registered Office showing the external building and inside office also showing therein at least one director/ KMP.
Penalty for Non-Filing of INC 20A
In case a company defaults in filing Form INC 20A, both company and the directors could be penalised by the ROC as follows:
- Penalty levied on the Company: The company shall be liable to a penalty of Rs. 50,000.
- Penalty levied on the directors: Every director who is in default shall be liable to a penalty of Rs. 1,000 for each day during which such default continues subject to a maximum amount of Rs. 1 Lakh.
- Strike off the company: If the Registrar of Company has a reasonable cause to believe that the company is not carrying on any business activities even after 180 days of incorporation, he may remove the name of the company from the Register of Companies.
What are the fees for filing Form INC 20A?
Fees for filing Form INC 20A for companies having share capital is as follows:
|
Nominal Share Capital (in Rs.) |
Applicable Fees in Rs. |
|
Share Capital less than Rs. 1 Lakh |
Rs. 200 |
|
Share Capital Rs. 1 Lakh to Rs. 4,99,999 |
Rs. 300 |
|
Share Capital Rs. 5 Lakh to Rs. 24,99,999 |
Rs. 400 |
|
Share Capital Rs. 25 Lakh to Rs. 99,99,999 |
Rs. 500 |
|
Share Capital Rs. 1 Crore or above |
Rs. 600 |
Additional Fees for delay in filing of Form INC-20A
|
Period of Delay |
Additional Fees applicable in Rs. |
|
Up to 30 days |
2 times of normal fees |
|
More than 30 days and up to 60 days |
4 times of normal fees |
|
More than 60 days and up to 90 days |
6 times of normal fees |
|
More than 90 days and up to 180 days |
10 times of normal fees |
|
More than 180 days |
12 times of normal fees |
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