WHAT IS DECLARATION FOR COMMENCEMENT OF BUSINESS?
According to the Businesses (Modification) Ordinance 2018, a certificate of the start of a business is required for all the enterprises registered on or after 2 November 2018. Form 20A is a letter made by the directors within 180 days of the day the company is incorporated. This is one of the major compliances because there are exceptionally heavy fines for non-filing.
For companies without equity capital, the applicable charge for filing e-Form is only Rs200. If the form is not sent in good time, a supplemental fee would be paid to the company as follows:
- Normal charge up to two times for up to 30 days.
- Standard fees four times above 30 days but not more than 60 days.
- Standard fee six times more than 60 days but not more than 90 days.
- The normal fee often more than 90 days but not more than 180 days.
- Standard fee twelve times for 180 days.
REQUIREMENT AND PROCEDURE :
The start of the company certificate must be issued within 180 days of the date of the incorporation and the e-Form submitted with the ROC (Company Registrar) in charge of the same subject matter. A declaration under Section 10A must be submitted by the directors of the kind of Board of Directors Resolution itself. Besides, e-Form also wants confirmation of the deposit of the paid-up share capital generated by subscribers.
Where an organization is undertaking subject-matter requiring registration or approval from any sectoral regulators such as Reserve Bank of India, Stock, and Exchange Board of India, etc, the company shall, along with the annexed declaration, obtain such registration or approval. Before submitting with the ROC, the form must be tested and approved by an expert (Registrar of Companies).
Penalties for default
- Sanctions to be enforced on a corporation: If the company does not fulfil the aforesaid condition, a sanction of Rs 50,000 will be imposed upon it.
- Penalty to be imposed on officers: every defaulting officer shall be liable to a penalty of Rs 1,000 per day for each day during which the default persists up to a limit of Rs 1,000,000.
- Company strike-off: If the Registrar has fair grounds to conclude that the company is not engaged in any activity or service after 180 days of incorporation, the Registrar can delete the name of the company from the Company Registry.
Fees paid for Form 20A filing :
The premium paid for companies that request Form 20A with share capital is:
- Rs. 200 fees for less than Rs. 1,00,000 equity capital.
- Rs. 300 fees if share capital crosses Rs. 1,00,000 but Rs. 4,99,999 not surpassed.
- Rs. 400 fees if share capital amounts to or exceeding Rs. 5,00,000 and Rs. 24,99,999.
- A fee of Rs. 500 if the equity capital exceeds or exceeds Rs. 25,00,000 but does not exceed 99,99,999.
- Rs. 600 charges if the equity capital exceeds or exceeds Rs. 1,00,00,000.
