Business Commencement Declaration

INC-20A Filing with ROC

Following incorporation, companies submit Form INC-20A to the ROC, confirming capital collection and Registered Address maintenance.

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Overview of Commencement Certificate

The Commencement Certificate for companies in India, as per the Companies Act, 2013, is a mandatory requirement for certain types of companies, particularly public limited companies. This certificate allows a company to commence business operations or exercise borrowing powers. To obtain the certificate, the company must file Form INC-20A with the Registrar of Companies, confirming that every subscriber to the memorandum has paid the value of the shares agreed to be taken and that the paid-up share capital is not less than the prescribed limit.

The declaration must also confirm that the company has filed a verification of its registered office with the Registrar. Once the Registrar is satisfied with the compliance, the Commencement Certificate is issued. Without this certificate, the company cannot start its business operations, ensuring that all regulatory requirements are met before commencing activities. This provision ensures transparency and accountability in the company’s operations from the outset.

Relevant sections, Rules and forms at a Glance

Particulars Section(S), Rule(S) and Name of e-Form(S)
The companies Act, 2013 Sections 10A, 12, 118, 173 AND 403
The companies (incorporation) Rules, 2014Rule 23 A
The companies (Registration Offices and Fees) Rules, 2014Rules 7, 8 and 12
Secretarial Standard-1 of ICSIClauses 3, 4, 5, 6, 7 and 8
e-form to be filed INC-20 A

Exemptions from Filing Form 20A

Companies that are not obligated to file Form 20A

mobile (2)
website (4)

Minimum Requirements

As Per Indian Trust Act, there are Minimum Requirements that need to be met For Trust Registration in India.

Geolocation Details

Subscriber’s Money Receipt

Office Photographs

Verification of Office Location

Documents for Commencement Certificate

Need to be updated

Initial Setup and Approvals

Documentation and Certification

Initial Setup and Approvals

Verification of Funds

Regulatory Approval (if applicable)

Director’s Declaration

Office Verification

Documentation and Certification

Board Resolution

Memorandum of Association

Digital Signature

Office Geolocation Photo

Verification of Funds

Board Resolution

Regulatory Approval (if applicable)

Memorandum of Association

Director’s Declaration

Digital Signature

Office Verification

Office Geolocation Photo

Commencement Certificate Procedure

Need to be updated

Notification of Registered Office
Within 30 days of incorporation, ensure the newly incorporated company files e-Form INC-22 with the Registrar under section 12(2) of the Companies Act, 2013, to confirm the location of the registered office, unless already provided during incorporation.

Commencement of Business Confirmation
Ensure the newly incorporated company has started its operations according to section 10A of the Companies Act, 2013, while ensuring no borrowing powers are exercised prematurely.

Subscription Receipt Verification
Within 180 days of incorporation, confirm receipt of subscription money from all subscribers in cash or kind, as agreed in the MOA. Adjustments for any pre-incorporation expenses should be approved by a board resolution.

Regulatory Approvals
Acquire necessary sectoral regulatory approvals (e.g., RBI, SEBI) for operations that require such sanctions. Ensure these approvals are obtained and documented

Preparation of Documents

Bank Statements and Subscription Details: Collect and prepare detailed bank statements and subscription receipts as required.

Declarations and Photographic Evidence: Gather declarations from each subscriber on the receipt of funds and ensure photographs of the registered office (interior and exterior) with a director who is signing the documents are taken.

Conducting and Documenting Board Meetings

Notice and Resolutions: Arrange a board meeting within 180 days post-incorporation to discuss and pass resolutions acknowledging receipt of subscription money, and authorize a director to sign e-Form INC-20A. Send notices at least 7 days before the meeting.

Minute-Keeping and Record Maintenance

Preparation and Circulation of Minutes: Draft minutes should be prepared and circulated to all directors within 15 days of the board meeting, allowing 7 days for comments. Finalize and enter the minutes in the minute book within 30 days from the meeting conclusion.

Signing and Distribution: Minutes must be signed by the chairman and certified by a company secretary or director not appointed as a secretary, circulated within 15 days of signing to all directors, except those who waived their right to receive them.

Submission of e-Form INC-20A

Filing Requirements: Fill and submit e-Form INC-20A along with necessary attachments with the Registrar of Companies within 180 days from the date of incorporation, ensuring compliance with the Companies (Registration Offices & Fees) Rules, 2014.

Time period for filing

Within 180 days from the date of incorporation of the company

Penalties for Non-Compliance

To discourage the formation and operation of shell companies, stringent penalties have been instituted. Non-compliance carries significant consequences

Company-Level Penalty

A penalty of INR 50,000 will be imposed on the company if it fails to meet the specified regulatory requirements.

Officer-Level Penalty

Each officer in default will face a daily penalty of INR 1,000 for every day the non-compliance continues, with a ceiling of INR 1,00,000.

Company Strike-Off

If the Registrar believes the company is not active or operational beyond 180 days after incorporation, it may strike off the company’s name from the Register of Companies

Frequently Asked Questions

What is a Certificate of Commencement of Business (COB)?

A Certificate of Commencement of Business (COB) is a declaration filed by a company's directors with the registrars, signifying the official commencement of the company's business operations.

Who needs to file Form INC-20A (COB)?

According to the Companies Act, 2013, all newly incorporated companies (public and private) must file Form INC-20A. Public companies with share capital are also required to file the COB to commence their business operations.

What is the timeframe for filing the COB after company incorporation?

Companies must file Form INC-20A within 180 days from the date of incorporation.

Are there exemptions from filing the COB?

Companies incorporated on November 2, 2018, without share capital are not required to file the COB. However, they can choose to do so for a fee of INR 200.

What are the government fees for filing Form INC-20A?

The government fees vary based on the company's share capital:
Less than INR 1,00,000: INR 200
INR 1,00,000 to INR 4,99,999: INR 300
INR 5,00,000 to INR 24,99,999: INR 400
INR 25,00,000 to INR 99,99,999: INR 500
INR 1,00,00,000 or more: INR 600

What are the consequences of not filing the COB within 180 days?

Failure to file the COB within the stipulated timeframe can result in the following consequences:
Company Name Removal: The registrar may remove the company's name from the list of registered companies.
Penal Provisions: The company and its officers may face penalties as per Section 11(2), which can go up to INR 5,000. Officers may also be individually fined up to INR 1,000 until the matter is resolved

Where can I obtain Form INC-20A for filing the COB?

Form INC-20A can be downloaded from the Ministry of Corporate Affairs (MCA) portal at MCA Portal.

Can I make corrections to Form INC-20A after submission?

It's essential to thoroughly review the form for errors before submission. Once submitted, corrections may not be possible. Ensure accuracy before final submission

Do I need to attach specific documents with Form INC-20A?

Yes, you should attach proof of payment by subscribers for share values (bank statement) and any other required documents, such as RBI registration for non-banking financial companies.

What are the key steps to file Form INC-20A?

The key steps include visiting the MCA Portal, downloading Form INC-20A, filling out the form with accurate details, attaching necessary documents, validating the form, and making the required payment through the MCA portal.

What is the role of a Digital Signature Certificate (DSC) in the filing process?

A DSC is required to digitally sign the form. The certifying professional and the director's DSC should be added to the form.

Is there a way to check the status of my COB filing and payment?

Yes, you can log in to the MCA portal to check the status of your COB filing and payment. If your payment is successful, a Service Request Number (SRN) will be generated.

Can a company resume operations after the COB filing if it was previously halted due to non-compliance?

Yes, once the COB is successfully filed, the company can resume its business operations.