Form INC-20A | Commencement of Business
There are many forms and compliances that a company needs to file on time in order to prevent it from any penalties or late fine. In those forms and compliances, one is form INC – 20 A which needs to be filed on time.
Here we will be discussing what are complications that a company has to face if it has not filed form INC – 20 A on time.
Form INC – 20 A
INC – 20 A form is a declaration form that has to be filed by the directors of the company at the time of commencement of the business.
This form needs to be filed according to Section 10A of Companies Act, 2013 and a new amendment of Rule 23A of companies Rules. Also, this form has to be verified by the Chartered Accountant, Company Secretary, or Cost Accountant.
The company which is incorporated before the announcement of the Companies Ordinance, 2018 which is an amendment i.e., before 2nd November 2018, and the companies not having share capital, do not need to file this form.
So according to the new amendment, all the companies which need to file the form have to file within 180 days of incorporation of the company.
Procedure Of Filing Form INC – 20 A
Now when we know that filing form INC – 20 A is essential for any company then how to file the form is an important question.
So, directors of the company have to provide a declaration of commencing business and with that, the proof of deposit of the paid-up share capital by the subscribers of the company has to be attached. The bank statement of the company including all credit entries with the receipts displaying subscription money that is received from all shareholders of the company.
After the form is attached with proper documents it has to be certified and verified by a practicing Chartered Accountant, Cost Accountant, or Company Secretary.
Following is the amount of the fee that needs to be paid while filing the form,
- If the share capital is less than 1 lakh then fees of Rs. 200
- If the share capital is 1 lakh or above up to 4,99,999 then fees of Rs. 300
- If the share capital is 5 lakh or above up to 24,99,999 then fees of Rs. 400
- If the share capital is 25 lakh or above up to 99,99,999 then fees of Rs. 500
- And if the share capital is 1 crore or above then fees of Rs. 600 is needed to be paid with the form.
Penalties For Not Filing of Form INC – 20 A
The fees for filing for form INC-20A will be charges as under:
|Up to 30 days||2 times of normal fees|
|More than 30 days and up to 60 days||4 times of normal fees|
|More than 60 days and up to 90 days||6 times of normal fees|
|More than 90 days and up to 180 days||10 times of normal fees|
|More than 180 days||12 times of normal fees|
In case of any default, the penalty of Rs. 50,000 has to be filed by the company if it doesn’t file the declaration form on time. Each and every officer in default will be liable to pay a penalty of Rs. 1000 per day maximum up to Rs. 1,00,000.
Also, the registrar shall strike off the name of the company from the Registrar of Companies if the they have reasonable grounds that the company is not into any business operations.
Additionally, the company cannot borrow the money and also can’t start a business if it doesn’t file the form on time.
So, filing the form INC – 20 A is necessary for every company as a declaration for the commencement of business. It will be good for the company to file the form in the given time frame otherwise it has to face the consequences of not doing so.