The Ministry of Corporate Affairs has re-introduced the concept of commencement of business certificate.
Every company incorporated on and after 2nd November 2018 must apply for issuance of another certificate known as The Certificate of Commencement of Business by filing a declaration in Form INC-20A before starting any business or operation or even entering into any kind of agreement of commercial nature.
FAQ on Certificate of Commencement of Business
Q1. What is e-form INC-20A?
The Ministry of Corporate Affairs has come up with Companies (Amendment) Ordinance 2018 by which it has been directed that all the companies which are registered after the Companies (Amendment) Ordinance, 2018 i.e after 2nd November 2018 and holding a share capital are required to file the eForm INC-20 to obtain Commencement of Business Certificate.
Q2. What is the time limit for filing the eform INC-20A?
180 Days from the date of incorporation of the company in case the same is on or after 2nd November 2018.
For example: If a company is registered on 16th November 2018 then the last date of filing the Form INC-20A shall be 16th May 2019.
Q3. Government fee payable for filing the Form INC-20A?
The eform shall be paid with the normal filing fee to the ROC based on the capital of the company, please refer below the table of the filing fee
|Sl. No||Authorised Capital (INR)||INR|
|1.||Less than 1,00,000||200|
|2.||1,00,000 to 4,99,999||300|
|3.||5,00,000 to 24,99,999||400|
|4.||25,00,000 to 99,99,999||500|
|5.||1,00,00,000 or more||600|
Q4. Can I file the Form INC-20A even when I miss the deadline of 180 Days?
As per MCA, If a company does not file the declaration in form INC-20A within 180 days of its incorporation then the status of the company shall be changed to “Struck Off(Defunct)”. However, the company may be revived after making an application to the National Company Law Tribunal (NCLT). If the company is ordered to be revived or in case the default has taken place but the ROC has not struck down the company yet the Form INC-20A can still be filed with additional government fee for delayed filing to the MCA.
Table of the additional fee as per rule:
|Sl. No||Delay||Additional Fee as times of Normal filing fee|
|1||Delay up to 30 Days||2 Times|
|2||More than 30 days and up to 60 days||4 Times|
|3||More than 60 days and up to 90 days||6 Times|
|4||More than 90 days and up to 180 days||10 Times|
|5||More than 180 days||12 Times|
Q5. What is the penalty of non-filing?
Penalties have been prescribed for both the Company as well as its Directors. The company in default shall be liable to pay a sum of Rs. 50,000, while every officer in default, shall pay Rs. 1000 per day for each day of default, however, the penalty shall not be more than Rs. 1,00,000.
Q6. What is need to file eform -INC-20A?
If a company does not file eFORM INC-20A it cannot commence its business, further it cannot borrow any funds, Besides, it shall result in severe consequence in form of closing down the company be removing its name from the Register of Companies.