What is Commencement of Business Certificate and form INC 20A?

All you need to know

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 are 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 INC 20 A(Commencement of Business Certificate):

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.

Who should file form INC 20A?

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.

Mi Book

Documents required for filing INC -20A

Proof of payment of subscribed capital

Bank statement/ NEFT / IMPS receipts.

Registration Certificate

Certificate of registration by RBI/ other regulators (applicable to NBFC)

Process of filing KYC online

Day 1

1. Collection, Preparation & Filing
2. Collection of Basic Information
3. Provide Required Documents
4. Online filing with Professional Certification
5. Sharing approval in an email

Consequences of non-filing

Company is liable to pay Rs. 50,000.

The registrar may initiate action for removal of the name of the Company.

Company would not be able to start its business or borrow money.

Every officer who is in default is liable to pay Rs. 1000/- per day of default upto a Maximum Rs. 1,00,000/-.