Under the Companies Act, a company is not allowed to commence business or exercise its borrowing powers until certain requirements are met.
1. One of these requirements is the filing of a Declaration of Commencement of Business (Form INC-20A) with the Registrar of Companies (ROC).
2. This declaration, which must be filed within 180 days of incorporation, states that every subscriber to the company's Memorandum of Association (MOA) has paid the agreed value of their shares.
3. The contents of the form must be verified by a practicing Company Secretary (CS), Chartered Accountant (CA), or Cost and Management Accountant (CMA).
4. These requirements are in place to ensure that companies are properly established and have the necessary resources to conduct business.
Under the Companies Act 2013, companies that do not have share capital are not required to file a Declaration of Commencement of Business (Form INC-20A). This includes companies that are not required to issue shares:
1. One Person Companies (OPCs)
2. Limited Liability Partnerships (LLPs)
3. companies registered under Section 8 of the Companies Act, which are non-profit organizations.
Following companies are not required to file Form INC-20A:-
1. Companies that are incorporated before 02nd November 2018 or
2. Companies that are limited by guarantee
1. 50,000/- for Company
2. 1000/- per day for defaulting directors (maximum Rs. 1,00,000/-)
3. Registrar can remove the name of the company
