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Business Commencement Declaration

Post Incorporation, A company has to file a declaration to the ROC in form INC-20A that it has collected the capital and maintains a Registered Address. Call us to complete the filing within the same day.

Before filing the Commencement of Declaration Form or INC-20A, two primary compliances must be ensured:
 
1. That the company has filed details of its registered office either at the time of its incorporation or within 30 days after the date of its incorporation.
2. That the entire amount of subscribed capital, as mentioned in the MOA of the company, has been deposited in its bank account before, during, or within 60 days after its incorporation.
 
There are certain prerequisites to be completed before filing the declaration of business commencement which are mentioned below:
 
  • Registered business address has been intimidated to the ROC;
  • A bank account has been opened in the name of the company;
  • The entire amount of subscribed capital has been deposited by the shareholders;
  • The company has not yet begun business activities;
  • Company’s bank statement does not contain any transaction except the ones related to its capital.

Process of filing declaration for business commencement?

The declaration of business commencement or INC-20A form can be found on the official website of the Ministry of Corporate Affairs. The form can be filled and submitted online to the ROC, along with the prescribed documents and the respective filing fees.
1 – Documentation

According to the provisions mentioned in the Companies Act, 2013, form INC-20A must be filed along with a prescribed set of supporting documents. All these documents must be arranged before beginning the process of filing the declaration in order to avoid any hindrance or hassle, and to drastically reduce the chances of a complete rejection of the form due to incorrect or inadequate documentation.

2 – Filling Form INC-20A

After having arranged all the documents, the applicant director can begin the process of filing INC-20A. For this, the applicant director will have to visit the official website of the Ministry of Corporate Affairs, where the form is available. The applicant can fill out the complete form online on the website itself and sign it using his Digital Signature Certificate. Additionally, an independently practicing CA, CS, or CMA must also certify the authenticity of the application.

3 – Attach necessary documents

After filing the declaration form online and signing it digitally, the applicant is required to upload all the documents sought for by the form in their digital formats.

4 – Submit form INC-20A

After having filled out all the details and uploading all the documents prescribed with the form, the form can be uploaded and submitted on the MCA website after the successful payment of its government fee.

5 – Issuance of the Acknowledgement Receipt

After form INC-20A is submitted to the ROC through the MCA portal, an acknowledgement receipt shall be generated as a conclusive proof of the filing of the declaration. 

Due Dates

The purpose of filing INC-20A is to prevent the origination of bogus companies. Although the Companies Act, 2013 prescribes only 180 days from the date of issue of Certificate of Incorporation for the filing of INC-20A, ideally it should be filed immediately after its incorporation. This is because the company cannot start its business activities or borrow money for its business operations unless the declaration has been filed. To prevent this time lag, we recommend that the declaration be filed asap after the business has been established.

Approval of Form INC-20A by the RoC

The form INC-20A is filed with certification of independently practicing professionals like Chartered Accountants, Cost Accountants, and Company Secretaries. Hence, it is the responsibility of such a professional to ensure that the declaration and the documents attached to the form are correct and authentic. The form INC-20A is filed with the prescribed fee and the same gets auto-approved by the ROC under the Straight To Process method.

Consequences of non-filing of INC-20A

The declaration of commencement of business or INC-20A is a mandatory legal compliance, and it is obvious that its non-filing, late filing, and incorrect filing is going to have penal consequences which are as below:

  • The defaulting company has to pay a penalty of Rs 50,000/- for failure to comply with the prescribed rules.
  • Every officer of the company that generally includes its directors, secretary, CFO and Manager would have to pay a penalty of Rs 1000 for each day of default. However the maximum penalty for every officer to be paid for non-compliance is capped at Rs 1,00,000/-
  • The maximum time allowed to file the INC-20A is 180 days from the date of incorporation. In case the company fails to file the said declaration the company would be struck off under section 148.