Form-INC- 20A
Form 20A is a declaration that needs to be filed by the directors of the company at the time of the commencement of the business. It should be verified by a Chartered Accountant (CA) or Company Secretary (CS) or a Cost Accountant in practice.
Form-INC-20A- An Overview
The newly rolled out and most discussed among the corporate is Form INC 20A. Those Companies registered in India after the commencement of the Companies (Amendment) Ordinance, 2018 and having share capital is required to obtain the commencement of business certificate before commencing any business or exercising any borrowing powers. One can say that the Ministry has reintroduced the concept of Commencement of Business Certificate via Form INC-20A on MCA.
Benefits OF - Form-INC-20A
Fund Raising
On filing the E-Form INC-20A within 180 days, the company will then be eligible to exercise the borrowing powers. Non filing of which may stop the company from borrowing the money.
No Penalties
If the company files the form INC-20A within 360 days, the company can be safeguarded from heavy penalties i.e Rs. 50,000 for company & for directors Rs.1000 per day of default up to a maximum of Rs.1 lakh.
Builds Credibility
All the informations relating to the company are made available in a public database. This feature makes it easy to authenticate the existence of the business that ultimately helps in improving business credibility
Documents Required for Form-INC-20A
- Subscribers proof of payment for value of shares i.e. bank statement of Subscribers
- Certificate of Incorporation
- Digital Signature of Director
Frequently Asked Questions
All the companies incorporated on or after 02/11/2018 and having a share capital to file form 20A.
Valid payment proof like NEFT / IMPS receipts need to be attached.
- Registrar may initiate action for the removal of the name of Company.
- Company cannot borrow money.
- Company cannot start business.