{"id":2107,"date":"2019-10-03T16:21:32","date_gmt":"2019-10-03T10:51:32","guid":{"rendered":"https:\/\/aktassociates.com\/blog\/?p=2107"},"modified":"2019-10-03T16:21:32","modified_gmt":"2019-10-03T10:51:32","slug":"certificate-of-commencement-of-business","status":"publish","type":"post","link":"https:\/\/aktassociates.com\/blog\/certificate-of-commencement-of-business\/","title":{"rendered":"Certificate of Commencement of Business"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Ministry of Law and Justice amended the companies act,2013 by way of\u00a0 Companies(Amendment) Ordinance,2018 by inserting a new section 10A prescribing to obtain commencement of business certificate. This article discusses all compliance regarding the Certificate of Commencement of Business.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-2110 size-full aligncenter\" src=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/10\/Certificate-of-Commencement-of-Business.png\" alt=\"Certificate of Commencement of Business\" width=\"700\" height=\"400\" srcset=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/10\/Certificate-of-Commencement-of-Business.png 700w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/10\/Certificate-of-Commencement-of-Business-300x171.png 300w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/10\/Certificate-of-Commencement-of-Business-20x11.png 20w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">The concept of obtaining commencement of business certificate was first introduced in the companies act,1956 and the same has been deleted via a notification dated 26.05.2015 for the promotion of \u201cEase of Doing Business in India\u201d. The same concept has now re-introduced via Companies(Amendment)Ordinance,2018.<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >In this article, we will discuss about...<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #1e73be;color:#1e73be\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #1e73be;color:#1e73be\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/aktassociates.com\/blog\/certificate-of-commencement-of-business\/#The_requirement_of_Section_10A\" title=\"The requirement of Section 10A\">The requirement of Section 10A<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/aktassociates.com\/blog\/certificate-of-commencement-of-business\/#The_due_date_for_obtaining_commencement_of_business_certificate\" title=\"The due date for obtaining commencement of business certificate\">The due date for obtaining commencement of business certificate<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/aktassociates.com\/blog\/certificate-of-commencement-of-business\/#Persons_not_required_to_file_FormNoINC-20A\" title=\"Persons not required to file Form.No.INC-20A\">Persons not required to file Form.No.INC-20A<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/aktassociates.com\/blog\/certificate-of-commencement-of-business\/#Persons_required_to_Obtain_commencement_of_business_certificate\" title=\"Persons required to Obtain commencement of business certificate\">Persons required to Obtain commencement of business certificate<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/aktassociates.com\/blog\/certificate-of-commencement-of-business\/#FormNoINC-20A\" title=\"Form.No.INC-20A\">Form.No.INC-20A<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/aktassociates.com\/blog\/certificate-of-commencement-of-business\/#Documents_Required_for_the_commencement_of_business\" title=\"Documents Required for the commencement of business\">Documents Required for the commencement of business<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/aktassociates.com\/blog\/certificate-of-commencement-of-business\/#Fees_for_FormNoINC20A_filing\" title=\"Fees for Form.No.INC.20A filing\">Fees for Form.No.INC.20A filing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/aktassociates.com\/blog\/certificate-of-commencement-of-business\/#Consequences_on_Defaults_made_in_Complying_with_Section_10A\" title=\"Consequences on Defaults made in Complying with Section 10A\">Consequences on Defaults made in Complying with Section 10A<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/aktassociates.com\/blog\/certificate-of-commencement-of-business\/#Removal_of_Company_Name_from_Register_of_Companies\" title=\"Removal of Company Name from Register of Companies\">Removal of Company Name from Register of Companies<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"The_requirement_of_Section_10A\"><\/span><strong>The requirement of Section 10A<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Section 10A requires that all the companies which are incorporated in India on or after the date of commencement of Ordinance,2018 i.e.., on or after 2<\/span><span style=\"font-weight: 400;\">nd<\/span><span style=\"font-weight: 400;\"> November 2018 having a\u00a0 share capital, has to obtain commencement of business certificate before commencing the business or exercising any borrowing powers.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_due_date_for_obtaining_commencement_of_business_certificate\"><\/span><strong>The due date for obtaining commencement of business certificate<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">As per the provisions of section 10A of the<a href=\"https:\/\/aktassociates.com\/blog\/incorporation-of-company\/\"> companies act,2013<\/a>, the companies within the period of 180 days from the date of incorporation, <\/span><span style=\"font-weight: 400;\">would\u00a0 have <\/span><span style=\"font-weight: 400;\">to file a declaration by a director with the registrar in\u00a0 Form.No.INC.20A, declaring that every subscriber to the memorandum of the company has paid the share value which was agreed to be taken by him on the date of making the declaration.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Persons_not_required_to_file_FormNoINC-20A\"><\/span><strong>Persons not required to file Form.No.INC-20A<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Following Persons are not required to file Form.No.INC-20A<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The companies which are incorporated before the commencement of Ordinance,2018 i.e.., before 2<\/span><span style=\"font-weight: 400;\">nd<\/span><span style=\"font-weight: 400;\"> November 2018.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The companies having no share capital<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Persons_required_to_Obtain_commencement_of_business_certificate\"><\/span><strong>Persons required to Obtain commencement of business certificate<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">\u00a0Following Persons are mandatorily required to file Form.No.INC-20A<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Both the <a href=\"https:\/\/aktassociates.com\/blog\/private-limited-company-registration\/\">private and Public limited companies h<\/a>aving share capital registered or incorporated on or after the date of commencement of Ordinance,2018 i.e.., on or after 2<\/span><span style=\"font-weight: 400;\">nd<\/span><span style=\"font-weight: 400;\"> November 2018.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"FormNoINC-20A\"><\/span><strong>Form.No.INC-20A<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The Ministry of Corporate Affairs (<a href=\"https:\/\/aktassociates.com\/blog\/steps-to-check-company-registration-status-with-mca\/\">MCA<\/a>) inserted a rule 23A via notification dated 18<\/span><span style=\"font-weight: 400;\">th<\/span><span style=\"font-weight: 400;\"> December 2018 stating that the declaration for commencement of business under section.10A of the companies act,2013, by a director shall be made in Form.No.INC.20A and the information contained in Form.No.INC.20A has to be verified by the Chartered Accountant or by the Cost Accountant or by the Company Secretary in Practise.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Documents_Required_for_the_commencement_of_business\"><\/span><strong>Documents Required for the commencement of business<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Following are the documents required to obtain the commencement of business certificate<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Certificate of Incorporation (COI)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A proof showing that all subscribers to the memorandum have deposited the value of shares which was agreed to be taken by them. (It can be a bank statement along with the Board Resolution)<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">In the case of a Non-Banking Financial Company (NBFC), a Registration certificate issued by the Reserve Bank of India (RBI) is also required.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Fees_for_FormNoINC20A_filing\"><\/span><strong>Fees for Form.No.INC.20A filing<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In case of companies having share capital<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Nominal Share Capital<\/b><\/td>\n<td><b>Fees Applicable<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Share Capital less than 1,00,000<\/span><\/td>\n<td><span style=\"font-weight: 400;\">200 Rupees\u00a0<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Share Capital 1,00,000 or more but not exceeding 4,99,999<\/span><\/td>\n<td><span style=\"font-weight: 400;\">300 Rupees<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Share Capital 5,00,000 or more but not exceeding 24,99,999<\/span><\/td>\n<td><span style=\"font-weight: 400;\">400 Rupees<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Share Capital 25,00,000 or above but not exceeding 99,99,999<\/span><\/td>\n<td><span style=\"font-weight: 400;\">500 Rupees<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Share Capital more than 1,00,00,000<\/span><\/td>\n<td><span style=\"font-weight: 400;\">600 Rupees<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-weight: 400;\">In the case of companies not having a share capital, Rs.200\/- fees shall be applicable.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If the Form.No.INC.20A has not filed within 180 days from the date of Incorporation and filed after the period of above said 180 days, following late fees shall be applicable<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>Delay period<\/b><\/td>\n<td><b>Applicable Fees<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Not exceeding 30 days\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">2 times of normal fees<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Exceeding 30 days but not exceeding 60 days<\/span><\/td>\n<td><span style=\"font-weight: 400;\">4 times of normal fees<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Exceeding 60 days but not exceeding 90 days<\/span><\/td>\n<td><span style=\"font-weight: 400;\">6 times of normal fees<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Exceeding 90 days but not exceeding 180 days<\/span><\/td>\n<td><span style=\"font-weight: 400;\">10 times of normal fees<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">exceeding 180 days<\/span><\/td>\n<td><span style=\"font-weight: 400;\">12 times of normal fees<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><a href=\"https:\/\/aktassociates.com\/start-a-business\/private-limited-company-registration\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-2113 size-full aligncenter\" src=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/10\/Private-Limited-Company-Registration.png\" alt=\"Private Limited Company Registration\" width=\"700\" height=\"150\" srcset=\"https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/10\/Private-Limited-Company-Registration.png 700w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/10\/Private-Limited-Company-Registration-300x64.png 300w, https:\/\/aktassociates.com\/blog\/wp-content\/uploads\/2019\/10\/Private-Limited-Company-Registration-20x4.png 20w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><\/a><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Consequences_on_Defaults_made_in_Complying_with_Section_10A\"><\/span><strong>Consequences on Defaults made in Complying with Section 10A<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">As per the provisions of section 10(A)(2), following penalties shall be levied for the defaults made in complying<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><strong>Penalty Levied on the Company:<\/strong><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The company shall be liable to the penalty of Rs.50,000\/-\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><strong>Penalty Levied on the Directors:<\/strong><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Every officer in default shall be liable to the penalty of Rs.1,000 for each day during which such default continues but not exceeding Rs.1,00,000\/-<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Removal_of_Company_Name_from_Register_of_Companies\"><\/span><strong>Removal of Company Name from Register of Companies<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Where no Declaration has been filed within the period of 180 days from the date of incorporation with the registrar and the registrar has the reason to believe that the company is not carrying any business or operations, the registrar may take the action for removal of the name of the company from the register of companies.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ministry of Law and Justice amended the companies act,2013 by way of\u00a0 Companies(Amendment) Ordinance,2018 by inserting a new section 10A &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"Certificate of Commencement of Business\" class=\"read-more button\" href=\"https:\/\/aktassociates.com\/blog\/certificate-of-commencement-of-business\/#more-2107\">Read more<span class=\"screen-reader-text\">Certificate of Commencement of Business<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":2112,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Certificate of Commencement of Business AKT Associates<\/title>\n<meta name=\"description\" content=\"Ministry of Law and Justice amended the companies act,2013 by way of\u00a0 Companies(Amendment) Ordinance,2018 by inserting a new section 10A prescribing to obtain commencement of business certificate. 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