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FORM 20 A

News & Blog

Declaration of Commencing of Business by FORM 20 A

The Companies (Amendment) Ordinance 2018 reintroduced the concept of commencement of business certification by the government. This stated that all the companies registered in India, which have a share capital, after the commencement of Companies (Amendment) Ordinance, 2018 would require procuring a commencement of business certificate from the government. This was enforced from the 2nd of November 2018.

Requirements and procedure

An e form 20 A needs to be filed with the RoC for obtaining the Certificate of business commencement by all companies. This shall be done within a time frame of 180 days from the date of incorporation. The procedure to do the same is

  1. Declaration under section 10 A needs to be provided from all the directors of the company in the form of a board resolution. The Director’s Declaration shall follow the following format

“I am authorized by the Board of Directors of the Company vide resolution number……………… dated………….. To sign this form and declare that all the requirements of Companies Act, 2013 and the Rules made thereunder with respect to the subject matter of this form and matters incidental thereto have been complied with. I further declare that:

  1. Whatever is stated in this form and in the attachments thereto is true, correct and complete and no information material to the subject matter of this form has been suppressed or concealed and is as per the original records
  2. All the required attachments have been completely legibly attached to this form
  • Every subscriber to the MOA has paid the value for shares agreed to be taken by him
  1. The company has filed with the registrar a verification of its registered office as provided in subsection (2) of section 12.”
  2. This shall be attached to the Form
  3. Proof of deposit of paid-up share capital shall also be attached and submitted with the Form
  4. All approval and registrations shall be procured
  5. All documents, registration certificates, approvals shall be verified by a certified practicing Companies Secretary
  6. The concerned fee shall be paid
  7. This shall be submitted to the RoC

The fee structure mentioned for filing FORM 20 A is

 

NOMINAL SHARE CAPITAL

 

 

PRESCRIBED FEE IN RS

 

Share capital < Rs 100000

 

 

200

 

 

Share capital is between 1 lakh to 4,99,999

 

 

 

300

 

Share capital is between 5 lakh to 24,99,999

 

 

400

 

Share capital is between 25 lakh to 99,99,999

 

 

500

 

Share capital in more than 1 Cr

 

 

600

 Additional fee in case form is not filed within the time prescribed

DELAY APPLICABLE PENALTY
Up to 30 days 2X normal fee
30 to 60 days 4X normal fee
60 to 90 days 6X normal fee
90 to 180 days 10X normal fee
More than 180 days 12X normal fee

Penalties in case of Non-compliance

The government has intentionally put provisions for imposing high penalties for non-compliance with the filing of FORM 20 A for strict incorporation of the rule.

  1. If a company fails to comply with the mentioned requirements it shall be liable to pay a penalty of Rs 50 thousand
  2. If an officer is found guilty of failing to comply with the filing of 20A shall be liable to pay a penalty of Rs 1000 per day until the compliance is met, which can be a maximum of Rs 1 lakh.
  3. The registrar shall strike off the name from the registers of any company which he suspects is not performing any business even after 180 days of incorporation.

Companies exempted from filing eForm 20A

The government has exempted the following companies from the filing of eForm 20A

  1. All companies that have been incorporated before 2nd of November 2018
  2. All companies which although have been incorporated after the incorporation of the Companies (Amendment) Ordinance 2018 i.e. 2nd of November 2018 but without any share capital

Apart from these two all other companies need to file eForm 20A to get a certificate of commencement within 180 days from the date of incorporation.

FAQs

Why do companies need to file eForm 20A?

The Companies (Amendment) Ordinance 2018 reintroduced the concept of commencement of business certification by the government. This stated that all the companies registered in India, which have a share capital, after the commencement of Companies (Amendment) Ordinance, 2018 would require procuring a commencement of business certificate from the government. This was enforced from the 2nd of November 2018. 

Which companies need to comply filing of eForm 20A?

All companies incorporated in India after 2nd November 2018 after the enforcement of Companies (Amendment) Ordinance 2018 and have a share capital need to file form 20A

What is the time given to companies for filing form 20A?

The companies are given a time of 180 days, to file form 20A and procure certificate of commencement, from the date of incorporation

What are the penalties for companies who do not comply with the filing of eForm 20A apart from the additional charges?

Apart from additional fees the government has also mentioned penalties if companies do not comply with the filing of eForm 20A

  1. If a company fails to comply with the mentioned requirements it shall be liable to pay a penalty of Rs 50 thousand
  2. If an officer is found guilty of failing to comply with the filing of 20A shall be liable to pay a penalty of Rs 1000 per day until the compliance is met, which can be a maximum of Rs 1 lakh.
  3. The registrar shall strike off the name from the registers of any company which he suspects is not performing any business even after 180 days of incorporation.

What is the fee mentioned for companies to file eForm 20A?

For companies with

  1. Share capital < Rs 100000 fees mentioned in Rs 200
  2. Share capital is between 1 lakh to 4,99,999fees mentioned in Rs 300
  • Share capital is between 5 lakh to 24,99,999fees mentioned in Rs 400
  1. Share capital is between 25 lakh to 99,99,999fees mentioned in Rs 500
  2. Share capital in more than 1 Cr fees mentioned is Rs 600

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