Certificate of Commencement of Business
The Companies Amendment Act 2018 has brought back the requirement to file a certificate of commencement of business for all companies registered on or after 2nd November 2018. This is particularly important compliance to follow because the penalties for non-filing are really high.
Requirement & Procedure:
This particular compliance has a straightforward process, a certificate of commencement of business has to be obtained within 180 days of the date of incorporation and an eForm has to be filed informing the concerned Registrar Of Companies regarding the same. A declaration from any of the director under section 10A has to be provided in the form of a Board Resolution in the eform itself. Proof of deposit of the paid-up share capital by the subscribers has to be attached in the eform. Provided if the company has objects such as banking, share broking or any such objectives which required prior approval of any sectoral regulator such letter of approval has to be obtained along with. The above-mentioned eForm has to be certified by a practising professional before filing with the Registrar Of Companies.
Penalties for Default
The penalties for default for this particular compliances are very high which has been intentional done so to curb out the number or shell companies incorporated. Following would be the penalties for default:
- Levied On Company: A penalty of INR 50,000 will be levied on any company which fails to comply with the above-mentioned requirement.
- Levied On Directors: Every such director in default shall be liable to a penalty of INR 1,000 per day of default upto INR 1,00,000.
- The Registrar can also issue a notice for Striking Off the name from the Registrar Of Companies if such default continues and the registrar has reasonable cause to believe if such company is not carrying on any business.
Know about 10 Post Incorporation Compliances to be followed by every private limited company Click Here.