As per the Companies (Amendment) Ordinance 2018, there is a requirement for all the companies registered on or after 2 November 2018 to file a certificate of commencement of business. Form 20A is a declaration filed by the directors within 180 days of the date of incorporation of the company. This is one of the most important compliances to follow as the penalties for non-filing is extremely high.
Companies which are not required to file Form 20A
- Companies incorporated before 2 November 2018 ( i.e before the commencement of the Companies ( Amendment) Ordinance, 2018).
- Companies incorporated after 2nd November 2018 without share capital.
Prerequisites and procedure to file e-Form 20A
- Directors of the company have to provide a declaration under section 10A in the form of board resolution.
- Also provide the proof of deposit of the paid-up share capital by the subscribers.
- Form 20A needs to be filed within the 180 days of incorporation of business and an eform is to be provided with the concerned Registrar of companies.
- Providing bank statements of the company having all credit entries along with the receipts showing subscription money received from all shareholders.
- The form has to be verified and certified by a Chartered accountant, company secretary, or Cost accountant before filing it with ROC.
Penalties for Default
The penalties for non-compliance are very high which has been done intentionally so as to curb out the number of shell companies incorporated. Following are the penalties for non-compliance:
- Penalty to be levied on the company: A penalty of Rs 50,000 will be levied on the company if it fails to comply with the mentioned requirement.
- Penalty to be levied on the officers: Every such officer in default shall be liable to a penalty of Rs 1,000 per day for each day during which the default continues subject to a maximum of Rs 1,00,000.
- Company strike-off: If the Registrar has reasonable grounds to believe that the company is not carrying on any business or operations even after 180 days of incorporation, the registrar may remove the name of the company from the Register of companies.
FAQs
Fee for filing Form 20A?
Fee for filing eForm for companies having share capital :
| Nominal Share Capital | Applicable Fees in (Rs.) |
|---|---|
| Where share capital is less than 1,00,000 | 200 |
| 1,00,000 or above but not exceeding 4,99,999 | 300 |
| 5,00,000 or above but not exceeding 24,99,999 | 400 |
| 25,00,000 or above but not exceeding 99,99,999 | 500 |
| 1,00,00,000 or above | 600 |
Fee for filing eForm for companies having no share capital:
In this case, the fees applicable is only Rs 200.
Additional fee (in case the form is not filed within the time)
| Nominal Share Capital | Applicable Fees in (Rs) |
|---|---|
| Up to 30 days | 2 times of normal fees |
| Above 30 but not exceeding 60 days | 4 times of normal fees |
| Above 60 days but not exceeding 90 days | 6 times of normal fees |
| Above 90 days but not exceeding 180 days | 10 times of normal fees |
| Above 180 days | 12 times of normal fees |
The time period for filing Form 20A?
Every company required to file form 20A shall file the same within 180 days of its incorporation.
