Are you need IT Support Engineer? Free Consultant

What If From INC-20A (Declaration for Commencement of Business) Is Filed After 180 Days?

  • March 15, 2024

As per section 10A of the Companies Act 2013, every company can commence its business/ operations only after filing a declaration with Registrar of Companies within a period of one hundred and eighty days from the date of incorporation/registration of the company to the effect that  (i) every subscriber to the memorandum/promoter has paid the value of the shares agreed to be taken by the promoter at the time of registration of the company and (ii) filed Form INC 22.

The Form prescribed for filing the declaration is Form INC-20A.

A company may fail to file Form No. INC-20A within one hundred and eighty days of the date of incorporation of the company due to various reasons such as inadvertence, due to shortage of fund, unfavorable commercial climate etc.  If the Form INC -20A cannot be filed in time the following are the consequences:

  1. The company  cannot do any business
  2. The company  cannot borrow
  3. The company  cannot  shall be liable to a penalty of fifty thousand rupees
  4. Every officer of the company  who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees.
  5. RoC may strike off the name of the company on the presumption that the company is not carrying on any business or operations &
  6. Company cannot file any E-form on MCA except INC-22 (Registered Office)

What is the solution?

File Form INC-20A still after 180 days. 

On filing the form , the Registrar of Companies shall issue Show cause Notice to the company and its directors  why penalty under section 454 for default in compliance with the requirements of section 10A of the Companies Act, 2013.

On getting the show cause notice, submit reply (within 15 /30 days) stating the reasons which resulted in belated filing of the form.

On getting your reply Registrar of Companies ,  he will issue order under section 454 for default in compliance with the requirements of section 10A of the Companies ACT, 2013 read with the Companies (adjudication of penalties) Rules, 2014.

Since the Registrar of Companies is  not empowered to condone the delay in filing the form and waive penalty , he will impose the penalty as showed in the show cause notice irrespective of  the reasons stated in your reply.

What then?

File appeal  to Regional Director within sixty days from the date on which the copy of the order is received by the company .

If the Regional Director  is  convinced that the delay was due to inadvertence and because of avoidable reasons,  he shall reduce the penalty.

Because , the  Regional Director is empowered to  confirm ,modify or set  aside the order of the Registrar of Companies.

Plse. contact us if you require any assistance or clarification.