Form INC-20A- Declaration for commencement of business: Important changes
Form INC 20A is a form that is required to be filed with the Registrar of Companies (RoC) under Section 10A of the Companies Act, 2013. Basically it is declaration, that all subscribers have brought in agreed amount (capital). Without filing the INC-20A, company having share capital can not commence any business activities or borrow funds. In simple words it is a declaration of commencement of business by a company.
Here any business activity can be construed differently but may include making any contract, agreement, payment of salary, sale purchase, raising funds or borrowing money etc.
A company is required to file form INC 20A within 180 days of its incorporation, as a proof of commencement of business. The form must be signed by a director of the company and be accompanied by a declaration from a practicing professional certifying that the company has actually started its business operations.
Attachments required to form INC-20A:
MCA vide notification no G.S.R. 42(E) dated 19th January 2023 revised form INC-20A. Now the revised INC-20A form requires the company to disclose the following additional details:
- -Registered office along with Longitude & Latitude
- -Details of subscription money received i.e. amount , date and IFSC bank account in which received.
- -Photograph of Registered Office showing external building and inside office also showing therein at least one Director/ KMP
Penalty for non-compliance with provisions of INC-20A:
- The company will be liable for a penalty of ₹50,000. and
- Every officer in default will be liable for a penalty of ₹1,000 per day for each day the default continues, with a maximum penalty of ₹1,00,000.
Not only the monetary penalty but the registrar may initiate proceeding to remove name of the company from the database. i.e. can initiate process of closure of the company.
