01 Mar Submitting Form 20A – Declaration for Business Commencement
Form 20A serves as a crucial declaration mandated for submission by company directors upon the initiation of business operations. It necessitates verification by a practicing Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant.
Overview:
Following the enactment of the Companies (Amendment) Ordinance 2018, companies incorporated on or after 2 November 2018 are obligated to furnish a certificate of business commencement. Form 20A constitutes a declaration to be lodged by directors within 180 days from the company’s incorporation date, making it a vital compliance measure due to severe penalties associated with non-compliance.
Exemptions from Form 20A Filing:
Certain entities are exempted from filing Form 20A:
- Companies incorporated before 2 November 2018, predating the Companies (Amendment) Ordinance, 2018.
- Companies established after 2 November 2018 without share capital.
Timeline for Form 20A Submission:
The submission of Form 20A must occur within 180 days from the company’s incorporation date.
Requirements and Procedures:
Procuring a certificate of business commencement within 180 days post-incorporation is imperative. The process entails filing an eForm with the relevant Registrar Of Companies (ROC). Directors must furnish a declaration under section 10A via a Board Resolution within the eForm. Additionally, evidence of paid-up share capital deposit by subscribers is mandatory. Companies engaged in activities requiring registration or approval from regulatory bodies such as the Reserve Bank of India or Securities and Exchange Board of India must obtain said approvals alongside the declaration. Prior to submission with the ROC, the eForm necessitates verification and certification by a practicing professional.
Penalties for Non-Compliance:
Stringent penalties are imposed for non-compliance to deter the proliferation of shell companies:
- Company Penalty: Failure to adhere to the requirement incurs a penalty of Rs 50,000 on the company.
- Officer Penalty: Officers in default are liable to a penalty of Rs 1,000 per day, not exceeding Rs 1,00,000.
- Company Strike-off: If the Registrar suspects a company of non-operation post-180 days since incorporation, it may strike off the company from the register.
Filing Fees for Form 20A:
For Companies with Share Capital: Fees vary based on the nominal share capital.
For Companies without Share Capital: A flat fee of Rs 200 applies.
Additional Fees for Late Filing:
Late filing incurs additional fees, which escalate based on the duration of delay.
No Comments