Commencement of Business Certificate

Trade, profession or occupation is generally understood as the term ‘business’. Across the years, several legislations/ amendments have been enacted in India to regulate and supervise businesses. One of such crucial enactments is Companies Act 2013 which describes the procedure for incorporation, formation and functioning of a company among others; to govern their working through regulations, compliances and penalties.

‘Commencement of Business’ You Should Know About This guide will give a lowdown of all you need to start a business in the UK legally, from what is needed to how long it takes.

It will be prepared from the company u/s 11 of Companies Act, 2023, a declaration has to filed with ROC by Directors of share capital company. This notice is given to show that each member of the MoA has paid his subscription in full. File it within 180 days of the date you were incorporated. This report is known as the Commencement of Business Declaration.

This was also a provision under the Companies Act, 1956 which had been struck off in the year 2015 but has been re-introduced by Section 10A of the Companies (Amendment Ordinance), 2018. By the explicit provision of that rule, no corporation having a capital stock shall commence business or have authority to do so, until such declaration is filed.

These companies are not required to file Form 20-A .

The following companies are not required to file Form 20A:

The companies for which the, has not been notified before 2nd November,2018 (i.e. the date when notification of amendment of -2018 was made), it shall be applicable in their case.

(for all companies incorporated post 2nd November,2018 without share capital)

Essential Summaries of Start-Up Certificate Employment provisions.

“Because of the pandemic, you are required to have 36 hours in three different quadrants some requirements for being able to receive your certificate:

1. An affidavit is to be submitted by the Directors of the Company with ROC.
2. The statement must be filed within SIX (…) MONTHS of incorporating.
3. If such a statement is not filed, the ROC can strike off company name from its register.
4. “The companies which do not submit Form 20 A will be treated as dormant and may also be removed from the register of companies by ROC,” a release issued today here said.
5. Form 20A should have the Board Resolution of the share capital payment deposit in addition to subscribers.
6. Necessary approvals, if any, of regulators like RBI or SEBI etc should be obtained.
7. The form should also be e-signed and certified by Chartered Accountant / Company Secretary or cost accountant.

Who needs to get a COB Certificate?

All new companies, whether public or private including OPCs having a share capital shall be required to obtain this certificate at the time of commencement of business or obtaining any loan.

Documents required at the time of application for Certificate of Commencement of Business

You’ll need the following documents:

1. Digital Signature Certificate (DSC)
2. Proof of registered company address
3. Bank statement of the company showing payment received from shareholders/subscribers
4. RBI approval (if required)
5. INDENTURED 6.03 (a) Notarized consents or approvals of all the directors
6. Copy of the Board Resolution

Procedure for Application (Form 20A)

1. Online Using MCA website Visit the official MCA (Ministry of Corporate Affairs) site and login.
2. MCA Services → E-Filing → Company Forms Download on clicking the same.
3. Get the Form INC-20A (declaration of commencement of business).
4. Fill in the company details. If you want to go deeper and find / discuss an issue in a document then please use search option ‘CIN’.
5. Save as draft to return and revise it later if you want.
6. Submit the form online. SRN would be recorded for tracking to a case.
7. Please also enclose the DSC (Digital Signature Certificate).
8. Pay the prescribed fees online.
9. Once the verification is over, MCA will acknowledge you via a mail.

Penalty of Non-Filing of Form 20A

The consequences for noncompliance are severe, and this is what prevents us from having shell companies:

1. ₹50,000 for failure to file on the company.
2. an officer will payienly upto maximum of ₹1,00,000.
3. The ROC has power to strike off the name of the company from its register if it does not file such declaration within 180 days after incorporation.

Additional Fees for Late Filing

If no declaration is filed within 180 days, the registration becomes void and ROC could determine that the company has not started business itself which may result in striking off the name of company.

Conclusion

No company with a share capital shall commence any business or exercise any borrowing powers unless— it has filed the declaration under clause (a) sub-section.11 of this act which shall be verified by an affidavit in Form.19 and is no default in filing a Annual Return with the Registrar for year immediately preceding: The corporations must file Form 20A within 6 months of incorporation [s. 11].

If you are in search of fool-proof or no-errors methods, then the Experts at ‘GarudaMudra’ may guide you getting a Commencement of Business Certificate.