Filing of Commencement of Business
Starting business operations? We ensure a hassle-free filing of your commencement documents, meeting all legal requirements so you can focus on launching your business smoothly.
If your private limited company is incorporated in India, then obtaining the Certificate of Incorporation from the Registrar of Companies (ROC) is just the initial step. To legally begin your operations, your company must file a declaration of commencement of business under Form INC-20A as mandated by the Companies Act, 2013. And this filing must be done within 180 days of incorporation to avoid any penalties and other legal consequences.
Filing Form INC-20A is essential for companies that have issued share capital, as it verifies that the company has received its subscription money from shareholders, and that it has complied with all prerequisites to commence business activities. And the non-compliance can result in severe penalties, restrictions on business operations, and legal ramifications for the directors of the company.
At Benchmark, we offer a simple and compliant solution for the filing of the Commencement of Business declaration, ensuring that your company complies to all statutory regulations.
Our Services
At Benchmark, we provide a range of services to ensure that your business complies with all the essential statutory requirements for the Filing of Commencement of Business. Here is a detailed breakdown of our services for your business.
| Service | Description | Key Benefits |
|---|---|---|
Bank account set up and capital deposit |
Assistance in opening a corporate bank account for the company and ensuring that the subscription money (initial share capital) is deposited by promoters. | Ensures compliance with the Companies Act, 2013, and is mandatory for filing Form INC-20A. |
Document preparation |
Helps with the preparation of all necessary documents, including Board Resolutions, Shareholder Approvals, and proof of receipt of subscription money. | Ensures all required documents are compliant and ready for submission. |
Compliance verification |
Make sure that all compliance requirements, such as registered office address and receipt of subscription money, have been fulfilled before filing. | Avoids penalties by ensuring all statutory compliance requirements are met before filing. |
Filing with registrar of companies (ROC) |
Filing the declaration of Commencement of Business using Form INC-20A with the Registrar of Companies (ROC) within the statutory deadline (180 days from incorporation). | Ensures timely and accurate filing to prevent penalties and enable legal business operations. |
Record keeping and documentation |
Comprehensive maintenance of all communications and documents, such as Board Resolutions, Shareholder Approvals, and Proof of Subscription Money. | Provides organised documentation for future audits or regulatory reviews. |
Regulatory compliance monitoring |
Monitoring compliance deadlines and sending timely reminders to avoid any lapses. Handling ROC communications for extension requests if needed. | Prevents non-compliance and operational disruptions by proactively managing deadlines. |
Post-filing monitoring |
Continuous monitoring of the filing status through the MCA portal, handling any ROC queries, and providing post-filing support to ensure smooth processing of the application. | Ensures that filings are processed without delays and addresses any regulatory issues. |
Advisory services |
Offering expert advice on best practices for ensuring compliance, minimising risks, and understanding the implications of different filing scenarios. | Helps businesses navigate complex regulatory landscapes with informed decisions and solutions. |
Why Choose Benchmark for Commencement of Business Filings
We at Benchmark recognise the complexities involved in filing the Commencement of Business declaration, and we help your business with our expertise in corporate compliance to ensure that your business meets all statutory requirements under the Companies Act, 2013. We know that filing Form INC-20A can be challenging, especially when dealing with challenges like delayed shareholder contributions or verifying the registered office address.
Hence our team stays up-to-date with the latest regulatory amendments and efficiently handles the entire process, from capital deposit compliance to final submission, ensuring your business can legally begin operations.
We make sure that the filing is done properly within the provided deadline (i.e., 180 days from incorporation), and if unforeseen delays occur, we handle all communications with the Registrar of Companies (ROC), applying for extensions as necessary.
Documents Required for Filing Commencement of Business
Below is a detailed list of the documents required for Filing Commencement of Business.
| Features | Description |
|---|---|
| Bank Statement for Subscription Money | A statement showing the receipt of subscription money from shareholders. This must be deposited in the company’s bank account before filing Form INC-20A. |
| Certificate of Incorporation | A copy of the Certificate of Incorporation issued by the Registrar of Companies (ROC), which confirms the registration of the company. |
| Board Resolution for Commencement | A formal Board Resolution passed by the company’s Board of Directors authorising the filing of Form INC-20A. This document must be prepared and approved in a board meeting. |
| Shareholder Approval | Shareholder Approval Letters confirming the subscription and payment of the initial share capital. This document is necessary to validate the company’s capital structure. |
| Proof of Registered Office Address | Documentation verifying the company’s registered office address (such as a lease agreement or utility bill) to ensure compliance with Section 12 of the Companies Act. |
| Affidavit/Declaration by Directors | A declaration from the company’s directors confirming that the business is ready to commence operations and that all compliance requirements have been met. |
| PAN and TAN Details | Copies of the company’s Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) as issued by the Income Tax Department. |
| Form INC-20A | The prepared and completed Form INC-20A, which will be filed with the Registrar of Companies (ROC) via the MCA portal. |
Process of Filing Commencement of Business
Filing the Commencement of Business declaration is a mandatory legal requirement under the Companies Act, 2013. The process involves several critical steps that must be followed to ensure compliance with regulatory authorities, particularly the Registrar of Companies (ROC).
Step 1: Open a Corporate Bank Account & Deposit Initial Capital
- The company must open a corporate bank account in the name of the business.
- Promoters must deposit the subscription money (initial share capital) into the corporate account. This deposit is crucial, as proof of receipt of this capital is required for filing Form INC-20A.
Step 2: Prepare the Necessary Documentation
- The company must gather and prepare all essential documents, including the Board Resolution authorising the commencement of business, shareholder approvals, and proof of receipt of subscription money.
- All documents must be checked to ensure they meet the requirements laid out under the Companies (Incorporation) Rules, 2014.
Step 3: Compliance Verification
- Before filing, the company must verify compliance with all necessary conditions:
- Confirmation of the receipt of subscription money from shareholders.
- Verification of the registered office address of the company.
- Approval of the Board Resolution for commencement.
- Our team at Benchmark ensures that all compliance requirements are met before proceeding with the filing.
Step 4: Filing Form INC-20A with the Registrar of Companies (ROC)
- Once all documents are ready and compliance is verified, Form INC-20A must be filled and submitted to the Registrar of Companies (ROC).
- The filing is done through the Ministry of Corporate Affairs (MCA) portal, where the form is uploaded along with all necessary documents such as the Bank Statement, Board Resolution, and proof of registered office.
Step 5: Post-Filing Monitoring
- After the form is filed, the status of the application is monitored via the MCA portal.
- Benchmark provides ongoing support during this phase, addressing any queries from the ROC or other regulatory authorities and ensuring that the process is completed without delays.
Step 6: Record Keeping
- Upon successful filing, it is important to maintain a record of all documents and communications, including the filing confirmation, for future audits or reviews.
- Benchmark ensures that all records, such as the Certificate of Commencement of Business, are kept securely and made available to the client for future reference.
Who is Exempt from Filing Form INC-20A?
As a business you must file the commencement of your business (Form INC-20A), certain companies are exempted from this requirement. And this exemption applies based on the company's structure, incorporation date, and business model. Understanding these exemptions helps businesses determine whether they need to comply with this filing requirement or not.
Categories of Companies Exempt from Filing INC-20A
Certain businesses are not required to file Form INC-20A due to regulatory exemptions. Below are the key categories of exempt entities:
- Companies incorporated before the Companies (Amendment) Ordinance, 2019
- Companies without share capital (e.g., Section 8 companies, certain LLPs)
- Sole proprietorships and partnerships that are not incorporated as private limited companies
- Government-owned companies in certain sectors that may have alternative regulatory requirements
- Companies that have not issued shares requiring capital deposit compliance
- Businesses registered under special regulatory frameworks that override INC-20A requirements
Non-Compliance Issues
Failing to file the Commencement of Business declaration within the stipulated 180-day period after incorporation can result in serious legal and financial repercussions under the Companies Act, 2013. Non-compliance with the requirements of Form INC-20A exposes the company and its directors to penalties, legal action, and operational risks.
Below are the key consequences of non-compliance:
- Penalties and Fines under Section 10A of the Companies Act, 2013.
- Interest on Unpaid Fines as per regulatory guidelines.
- Legal Action including prosecution and potential imprisonment of directors.
- Suspension of Business Operations until compliance is restored.
- Reputational Damage impacting relationships with stakeholders and investors.
- Restriction on Shareholder Activities including the transfer or sale of shares.
Conclusion
Filing the Commencement of Business declaration is an essential legal requirement for any private limited company in India. Compliance with the Companies Act, 2013, and ensuring that all statutory obligations are met is essential to avoid penalties, legal consequences, and operational disruptions. By partnering with Benchmark, you can rest assured that your business will meet all regulatory requirements seamlessly, allowing you to focus on building and growing your business.
Ready to file your Commencement of Business declaration?
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Let our team of experts handle the entire process for you, from documentation to filing and post-filing support. Contact Benchmark today to ensure your business is fully compliant and ready to operate.
FAQs
Is it mandatory for every company to file Form INC-20A?
No, Form INC-20A is mandatory for all companies with share capital incorporated after the Companies (Amendment) Ordinance, 2019. Companies without share capital are exempt.
What happens if my company fails to file Form INC-20A within the deadline?
Failure to file Form INC-20A can lead to penalties, restrictions on business operations, and the company being struck off by the Registrar of Companies (ROC).
What should be done if there is an error in the filed Form INC-20A?
In case of errors, companies can submit a request for correction to the ROC, or file a revised form, depending on the nature of the mistake.
Does filing Form INC-20A allow the company to raise external funding?
Filing Form INC-20A confirms the commencement of business, which is a prerequisite for raising external capital or seeking loans from financial institutions.
What is the fee for filing Form INC-20A?
The filing fee for Form INC-20A depends on the company's authorised capital. Additional late fees may apply if filing is delayed beyond the due date.