The newly rolled out and most discussed among the corporate is Form INC 20A. Those Companies registered in India after the commencement of the Companies (Amendment) Ordinance, 2018 and having share capital is required to obtain the commencement of business certificate before commencing any business or exercising any borrowing powers. One can say that the Ministry has reintroduced the concept of Commencement of Business Certificate via Form INC-20A on MCA.
Form 20A is a declaration that needs to be filed by the directors of the company at the time of the commencement of the business. It should be verified by a Chartered Accountant (CA) or Company Secretary (CS) or a Cost Accountant in practice.
On the 2nd of November, 2018 the Companies (Amendment) Ordinance 2018 was introduced, hence any company incorporated after this date will be required to file Form INC-20A. within 180 days from the date of incorporation of the company.
Where share capital is less than 1,00,000
1,00,000 or above but not exceeding 4,99,999
5,00,000 or above but not exceeding 24,99,999
25,00,000 or above but not exceeding 99,99,999
1,00,00,000 or above
200
300
400
500
600
Period of delay
Up to 30 days
More than 30 days and up to 60 days
More than 60 days and up to 90 days
More than 90 days and up to 180 days
More than 180 days
2 times of normal fees
4 times of normal fees
6 times of normal fees
10 times of normal fees
12 times of normal fees
Consequences of non-filing of Form-INC-20A may create hindrance for companies to start their business and also while borrowing of money. The company would be liable to a Penalty for late filing the Form INC-20A if it exceeds 360 days of from the date of incorporation.
Read more here on late filing fees for INC 20A.
Suggested Read: Mandatory Compliance for Private Limited Company
An eminent business platform and a progressive concept, which helps end-to-end incorporation, Company Annual Filing, LLP Annual Filing, Tax Consultancy Services, and management consultancy services to clients in India and abroad. Filing of E-Form INC-20A is easy, seamless, cheapest and quickest with Get in touch with Compliance Manager to understand what is E – Form INC-20A filing process and whether you need to file E – Form INC-20A. You may get in touch with our compliance manager on email gaurnnatitaxationandlegal@gmail.com for free consultation.
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On filing the E-Form INC-20A within 180 days, the company will then be eligible to exercise the borrowing powers. Non filing of which may stop the company from borrowing the money.
If the company files the form INC-20A within 360 days, the company can be safeguarded from heavy penalties i.e Rs. 50,000 for company & for directors Rs.1000 per day of default up to a maximum of Rs.1 lakh
All the informations relating to the company are made available in a public database. This feature makes it easy to authenticate the existence of the business that ultimately helps in improving business credibility
