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INC 20A Commencment of Business Certificate

INC 20-A is a form to be filed by a Company for commencement of Business within 180 days of Incorporation of a Company. Any company incorporated after November 2018 would be required to obtain Commencement of Business Certificate.

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How to file Commencment of Business Certificate INC 20A
We help you to file you INC-20A Compliance in three easy steps
Understanding the concept

One of our team member helps you to understand the concept and the documents required

Submission of requisite documents

Submit the documents required to file INC-20A Form

Uploading and Approval

After verification of all the documents, we prepare your form, upload it and track the application status.

General Overview

Form INC-20A was introduced via Companies (Amendment) Ordinance 2018 wherein  all companies registered in India after the commencement of the Companies (Amendment) Ordinance, 2018 and having a share capital, mandatory to obtain commencement of business certificate before commencing any business or exercising any borrowing powers. Therefore after 02.11.2018, any company incorporated after this date would be required to obtain Commencement of Business Certificate.

It should be filed by the directors within 180 days from the date of incorporation of a company. Once the company receives a certificate of incorporation, the directors will file a declaration certificate of commencement of business. 

Important points to be consider:-
  1. Filing of Form INC-20A is mandatory to obtain certificate of Commencement of business.
  2. All companies incorporated on or after 02/11/2018 and having share capital shall file Form INC-20A.
  3. Those companies who incorporate before 02/11/2018 and limited by guarantee not having share capital shall not require filing form INC-20A.
  4. Due date for the first time filing Filing Form INC-20A is within 180days from the date of incorporation.
  5. If form INC-20A is not file on time then company liable to pay Rs.50,000 as a penalty and Every officer who in default liable to pay Rs.1000/- per day of default up to Maximum Rs.100,000.
  6. For Non filing Form INC-20A within Time then Company cannot start business and company cannot borrow money.

Documents Required

Following documents required to file INC-20A
  1. Certificate of Incorporation
  2. Subscriber proof of payment for value of shares like Copy of Bank statement which shown that subscriber has deposit the value of shares or valid proof payment like IMPS/NEFT/RTGS detail
  3. As per section 10A of Companies Act 2013, the company director/s will have to provide a declaration of the board resolution.
  4. The form is required to be verified and certified by a practicing Company Secretary, Chartered Accountant or Cost Accountant before filing it with the Registrar of Companies (ROC).

Consequences of not filing the form

Following are the consequences of not filing INC-20A Form
  1. Company cannot commence the business.
  2. Company cannot borrow the money.
  3. Registrar may initiate the action for removal the name of the company.
  4. Company liable to pay penalty of Rs. 50,000/-
  5. Every officer who is in default liable to pay of Rs. 1,000/- per day subject to maximum of Rs. 1,00,000/-

Benefits of filing INC-20A

Following are benefits of filing INC-20A:
 
  1. Fund Raising- On filing the E-Form INC-20A within 180 days, the company will then be eligible to exercise the borrowing powers. Non filing of which may stop the company from borrowing the money.
  2. Builds Credibility- All the informations relating to the company are made available in a public database. This feature makes it easy to authenticate the existence of the business that ultimately helps in improving business credibility.
  3. No penalties- If the company files the form INC-20A within 180 days, the company can be safeguarded from incurring heavy penalties i.e, Rs. 50,000/- for company and for directors Rs.1000 per day of default up to a maximum of Rs.1 lakh.

Why Tax my Tax

We help you to file your INC-20A  with complete online support. You need not to step outside your home and we guide you to enter into the business world hasselfree. At Tax My Tax , our team helps you to understand the concept and documentation require to file the form. 
  • Documentation as per Companies Act 2013
  • Professional Assistance
  • Dedicated Team
  • Time required: 3-4 working days
  • 100% Online Process

FAQ's

Is Inc 20a STP form?

Form 20A is in STP Mode (Auto Approved) and No Certificate will be issued by Department for approval of Form 20A.

Can shares be issued for cash?

Equity shares may be issued for cash at par or at premium. When a company issues shares at a price equal to the face value (nominal value), it is known as issue at par. When a company issues shares at a price more than the face value, the shares are said to be issued at premium. The excess is called as premium.

What is the time limit for issue of a share certificate?

After the incorporation of the company, the company needs to issue the share certificates within two months from incorporation date.

What are the details required to be provided in 'Form 20A'?

The details required are that all shareholders (as listed in the MOA) have paid the total value of shares, as agreed by each shareholder.

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