Business Commencement Declaration
INC-20A Filing with ROC
Following incorporation, companies submit Form INC-20A to the ROC, confirming capital collection and Registered Address maintenance.
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- INC-20A Filing for Authorized capital up to INR 25 Lakh
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- INC-20A Filing for Authorized capital more than INR 25 Lakh
Overview of Commencement Certificate
The Commencement Certificate for companies in India, as per the Companies Act, 2013, is a mandatory requirement for certain types of companies, particularly public limited companies. This certificate allows a company to commence business operations or exercise borrowing powers. To obtain the certificate, the company must file Form INC-20A with the Registrar of Companies, confirming that every subscriber to the memorandum has paid the value of the shares agreed to be taken and that the paid-up share capital is not less than the prescribed limit.
The declaration must also confirm that the company has filed a verification of its registered office with the Registrar. Once the Registrar is satisfied with the compliance, the Commencement Certificate is issued. Without this certificate, the company cannot start its business operations, ensuring that all regulatory requirements are met before commencing activities. This provision ensures transparency and accountability in the company’s operations from the outset.
Relevant sections, Rules and forms at a Glance
| Particulars | Section(S), Rule(S) and Name of e-Form(S) |
|---|---|
| The companies Act, 2013 | Sections 10A, 12, 118, 173 AND 403 |
| The companies (incorporation) Rules, 2014 | Rule 23 A |
| The companies (Registration Offices and Fees) Rules, 2014 | Rules 7, 8 and 12 |
| Secretarial Standard-1 of ICSI | Clauses 3, 4, 5, 6, 7 and 8 |
| e-form to be filed | INC-20 A |
Exemptions from Filing Form 20A
Companies that are not obligated to file Form 20A
Minimum Requirements
As Per Indian Trust Act, there are Minimum Requirements that need to be met For Trust Registration in India.
Geolocation Details
Subscriber’s Money Receipt
Office Photographs
Verification of Office Location
Documents for Commencement Certificate
Need to be updated
Initial Setup and Approvals
Documentation and Certification
Initial Setup and Approvals
Verification of Funds
Regulatory Approval (if applicable)
Director’s Declaration
Office Verification
Documentation and Certification
Board Resolution
Memorandum of Association
Digital Signature
Office Geolocation Photo
Verification of Funds
Board Resolution
Regulatory Approval (if applicable)
Memorandum of Association
Director’s Declaration
Digital Signature
Office Verification
Office Geolocation Photo
Commencement Certificate Procedure
Need to be updated
Notification of Registered Office
Within 30 days of incorporation, ensure the newly incorporated company files e-Form INC-22 with the Registrar under section 12(2) of the Companies Act, 2013, to confirm the location of the registered office, unless already provided during incorporation.
Commencement of Business Confirmation
Ensure the newly incorporated company has started its operations according to section 10A of the Companies Act, 2013, while ensuring no borrowing powers are exercised prematurely.
Subscription Receipt Verification
Within 180 days of incorporation, confirm receipt of subscription money from all subscribers in cash or kind, as agreed in the MOA. Adjustments for any pre-incorporation expenses should be approved by a board resolution.
Regulatory Approvals
Acquire necessary sectoral regulatory approvals (e.g., RBI, SEBI) for operations that require such sanctions. Ensure these approvals are obtained and documented
Preparation of Documents
Bank Statements and Subscription Details: Collect and prepare detailed bank statements and subscription receipts as required.
Declarations and Photographic Evidence: Gather declarations from each subscriber on the receipt of funds and ensure photographs of the registered office (interior and exterior) with a director who is signing the documents are taken.
Conducting and Documenting Board Meetings
Notice and Resolutions: Arrange a board meeting within 180 days post-incorporation to discuss and pass resolutions acknowledging receipt of subscription money, and authorize a director to sign e-Form INC-20A. Send notices at least 7 days before the meeting.
Minute-Keeping and Record Maintenance
Preparation and Circulation of Minutes: Draft minutes should be prepared and circulated to all directors within 15 days of the board meeting, allowing 7 days for comments. Finalize and enter the minutes in the minute book within 30 days from the meeting conclusion.
Signing and Distribution: Minutes must be signed by the chairman and certified by a company secretary or director not appointed as a secretary, circulated within 15 days of signing to all directors, except those who waived their right to receive them.
Submission of e-Form INC-20A
Filing Requirements: Fill and submit e-Form INC-20A along with necessary attachments with the Registrar of Companies within 180 days from the date of incorporation, ensuring compliance with the Companies (Registration Offices & Fees) Rules, 2014.
Time period for filing
Within 180 days from the date of incorporation of the company
Date of incorporation of the company
Commencement of Business (INC-20A)
Penalties for Non-Compliance
To discourage the formation and operation of shell companies, stringent penalties have been instituted. Non-compliance carries significant consequences
Company-Level Penalty
A penalty of INR 50,000 will be imposed on the company if it fails to meet the specified regulatory requirements.
Officer-Level Penalty
Each officer in default will face a daily penalty of INR 1,000 for every day the non-compliance continues, with a ceiling of INR 1,00,000.
Company Strike-Off
If the Registrar believes the company is not active or operational beyond 180 days after incorporation, it may strike off the company’s name from the Register of Companies
