Commencement of business



Section 10A of C A, 2013- Commencement of business .

(1) A company registered after the introduction of the Companies (Amendment) Ordinance, 2019 and having a share capital cannot start any business or operation or can exercise any borrowing powers unless—

(a) a declaration in prescribed form is filed by a director within a period of 180 days of the date of registration under companies act and verified in such manner as may be prescribed, with the Registrar that every shareholder to the memorandum has paid the amount of the shares value agreed to be taken by him on the date of declaration; and

Comment: 23A Declaration at the time of commencement of business.

The declaration under section 10A of companies act 2013 by a director shall be in Form No. lNC-20A and shall be filed as provided in the Companies (Registration Offices and Fees) Rules, 2014 and the contents of the said form shall be verified by a CS or a CA or a CWA. in practice:

Provided that in the case of a company having objects need registration or approval from any sectoral regulators such as the RBI, Securities and SEBI, etc., the registration or approval, as the case may be from such regulator shall also be obtained and attached with the declaration.]

(b) The company has to file with the Registrar of company a verification of its registered office.

Applicable to

Companies incorporated on or after 02/11/2018

Due date for filing

Within 180 days of Incorporation

Form to be filed

INC – 20A

Attachments Required

Subscribers proof of payment for value of shares (Bank statement of company having all credit entries for receipt of subscription money received from all subscribers to MOA may be deemed fit)

Non Compliance of filing

1. If the register has a reasonable cause to believe the company is not carrying on any business or operation, Remove of name of the company from register of companies.

2. Cannot Start Business activity and Exercise any borrowing power (section 10A)

Any default

Penalty :

Company : 50,000 Rs and

Every officer who is default : 1,000 for per day up to 1,00,000 Rs.

Fees for filing INC – 20A

200 Rs/-

Additional Fees for delay in filing

delay Upto  30 days

> 30 < 60 days

> 60 < 90 days

> 90 < 180 days

> 180 days

Fees to be payable

2*Normal fees

4*Normal fees

6*Normal fees

10*normal fees

12*normal fees


(2) If any non compliances is made in following with the requirements of this section, the company shall be liable to a penalty of fifty 50,000 and every officer who is in default shall be liable to a penalty of 1,000 for each day during which such default continues but not exceeding an amount of 1,00,000 rupees.

(3) Where no declaration has been filed with the Registrar under clause (a) of sub-section (1) within a period of one hundred and eighty days of the date of incorporation of the company and the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may, without prejudice to the provisions of sub-section (2), initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.