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BUSINESS COMMENCEMENT BY COMPANY

 

Limited Company can Commence Business activities only after filing a declaration to the Registrar that every subscriber to memorandum has brought the subscribed capital and filing of verification of registered office address.

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Overview – Commencement Business by Limited Company

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OVERVIEW

Companies incorporated on or after 02.11.2018 can commence the business activities only after filing a declaration to the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him and filing the verification of registered office Form INC-32 if the company was registered with a temporary address while incorporation.

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A company incorporated on or after 02.11.2018 and having a share capital shall commence any business or exercise any borrowing powers only after complying the following requirements:

  • Filing a declaration with the Registrar of Companies that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of such declaration. This declaration has to be filed by the company within a period of 180 days of the date of incorporation of the company.

 

  • Filing of INC-22 for verification of its registered office if the company was registered with a temporary address while filing SPICe Form INC-32.

FILING OF REGISTERED OFFICE (FORM INC-22)

Filing of Form lNC-22 is not required in case where the company has filed required details for verification of Registered office address as Permanent Address maintains its registered office at the given correspondence address.

 

Business Commencement by Company – Requirements


All the subscribers of memorandum to bring agreed capital

 

File Declaration with Registrar of Companies

 

Complete verification of Registered office address

 

Process for Commencement Business by Company


Open Bank Account

It is preferable to open a Bank Account in the name of the Company immediately after incorporation to deposit the subscribed capital of company.

Infusion of Capital by All subscribers

All subscribers to Memorandum to bring value of the shares agreed to be taken by him. The amount can be brought in to company either in cash or as deposit to company bank account.

Filing declaration with Registrar of Companies

A declaration to be filed with Registrar of Companies confirming that all subscribers to Memorandum to bring value of the shares agreed to be taken by him. This declaration has to be filed within 180 days of incorporation of company.

Verification of Registered Office

Filing of INC-22 is required for verification of its registered office if the company was registered with a temporary address while filing SPICe Form INC-32.

Documents Required


Declaration to be filed with ROC

The Company has to prove that all the subscribers of Memorandum has paid the value of the shares agreed to be taken by him

  1. Bank Statement reflecting the credit of subscribed capital
  2. Any other Proof of infusion of Capital
Filing of INC-22

 

  1. Required in case the company was registered with a temporary address while filing SPICe Form INC-32.
  2. Rent Agreement in the Name of Company (if any)
  3. Proof Address of Registered Office
  4. NOC from the owner of premises

Requirements


Penalty for Non-Compliance

If a company makes any default in complying with the above requirements, the company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which su

Closure of Company By ROC

If the company has not filed the declaration within a period of 180 days of the date of incorporation of the company, the Registrar may initiate action for the removal of the name of the company from the register of companies on the reasonable belief that

Is Business Commencement applicable to all companies?
It is applicable to all companies incorporated on or after 02.11.2018 and having a share capital
Why is Business Commencement applicable private companies?
As per Section 10A of the Companies Act (as inserted by the Companies Amendment Ordinance 2018) every company incorporated after 02.11.2018 can commence the business activities ONLY AFTER filing a declaration to the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him and filing the verification of registered office
What is the time line for filing declaration for Business Commencement?
The declaration for Business Commencement has to be filed by the company within a period of 180 days of the date of incorporation of the company

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