{"id":297,"date":"2019-02-27T23:22:38","date_gmt":"2019-02-27T17:52:38","guid":{"rendered":"https:\/\/ezzus.com\/blog\/?p=297"},"modified":"2020-05-21T20:34:53","modified_gmt":"2020-05-21T15:04:53","slug":"certificate-of-commencement-of-business-the-companies-amendment-ordinance-2018","status":"publish","type":"post","link":"https:\/\/www.ezzus.com\/blog\/certificate-of-commencement-of-business-the-companies-amendment-ordinance-2018\/","title":{"rendered":"Certificate of Commencement of Business The Companies (Amendment) Ordinance 2018"},"content":{"rendered":"\n<p><strong>Certificate of Commencement of Business The Companies (Amendment) Ordinance 2018<\/strong><\/p>\n\n\n\n<p>Ministry of Corporate affairs (MCA) is again back with the very important and Much Harder decision of getting the Certificate of Commencement of Business Requirement which was also available in the erstwhile Companies Act, 1956.<\/p>\n\n\n\n<p><strong>Effective Date<\/strong><strong>: On 2<sup>nd<\/sup> of November, 2018 our President passed an ordinance\ncalled The Companies (amendment) ordinance, 2018 and passed a new section 10A <\/strong>to provide\nfor a declaration by all companies having share capital before it commences its\nbusinesses or exercises borrowing power.<\/p>\n\n\n\n<p><strong>Provision<\/strong>: As per Section 10A,\nAll Companies having Share Capital Incorporated on or after 2<sup>nd<\/sup> of\nNovember 2018, shall have to file a declaration within 180 days from the Date\nof Incorporation in Eform Inc-20A declaring that every subscriber to the memorandum\nhas paid the value of the shares agreed to be taken by him.<\/p>\n\n\n\n<p><strong>Why COB<\/strong>: The concept of COB is a drive of Ministry to run the business in more\nlegally &amp; Transparent Manner without giving any chance of Curbing Black\nmoney in the form of Share Subscription Amount.<\/p>\n\n\n\n<p><strong>COB: <\/strong>Certificate of\nCommencement of Business is one of the steps we need to follow between\nregistering and running business. It is issued by the Registrar of Companies\nafter filing a declaration that all the subscribers to the MOA has paid the\nsubscription amount agreed by them.<\/p>\n\n\n\n<p><strong>Applicable on: <\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>All Companies (Public, Private, OPC, Section 8 Company having Share Capital Incorporated on or after 2<sup>nd<\/sup> November, 2018<\/li><\/ul>\n\n\n\n<p><strong>Non Applicability: <\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>All Companies (Public, Private, OPC, Section 8 Company Not having Share Capital or Companies Limited by Guarantee incorporated before 2<sup>nd<\/sup> November, 2018<\/li><\/ul>\n\n\n\n<p><strong>Form for COB:&nbsp; <\/strong>Eform Inc-20A is required to be filed by\nall companies for getting COB along with the Declaration<\/p>\n\n\n\n<p><strong>Purpose of the Eform Inc-20A:&nbsp;&nbsp; <\/strong>The main purpose of the\nform to get a declaration that every subscriber to the memorandum has paid the\nvalue of the shares agreed to be taken by him\/her.<\/p>\n\n\n\n<p><strong>Verification of Declaration;<\/strong> The\ndeclaration in Inc-20A shall be verified by a company Secretary or a chartered\nAccountant or a cost Accountant in practice:&nbsp;<\/p>\n\n\n\n<p><strong>Best Practice for\nCompanies related to Capital Clause<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>For Authorized Capital:<\/strong> Authorized capital of the company should be made at higher limit , so to issue shares at the later stage if required capital is introduced afterwards. <\/li><li><strong>For Paid Up capital:<\/strong> As normal practice every company is registered with Rs. Some capital ie. 1000\/10,000\/1,00,000 or higher. now it is compulsory that the subscribed\/PUC should be compulsory deposited in Company Bank Account within 180 days of its registration, so it is advisable to avoid incorporating company with higher paid up amount and promoters should go with very less amount like Rs. 1000\/10000 as paid up amount that can easily be paid to company account and <\/li><li>Lesser amount can also be paid to company by cash , so having lesser amount of paid up capital will help you to better comply with this section. It Is always advisable to deposit the subscription amount to company bank Account as soon as Bank Account of newly incorporated company is opened<\/li><\/ul>\n\n\n\n<p><strong>Fees: <\/strong><\/p>\n\n\n\n<p><strong>What is the Fees of Form Inc-20A?<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Fees for Filing within Due Date<\/li><\/ul>\n\n\n\n<p>If\nthe Nominal Share Capital is <\/p>\n\n\n\n<p>Less than 1,00,000&nbsp;&nbsp;&nbsp;&nbsp; &#8211;&nbsp;&nbsp;&nbsp;&nbsp;\nRs 200<\/p>\n\n\n\n<p>1,00,000 to\n4,99,999&nbsp;&nbsp;&nbsp; &#8211;&nbsp;&nbsp;&nbsp; Rs 300<\/p>\n\n\n\n<p>5,00,000 to\n24,99,999&nbsp; &#8211;&nbsp;&nbsp;&nbsp; Rs 400<\/p>\n\n\n\n<p>25,00,000 to\n99,99,999 &#8211;&nbsp;&nbsp; Rs 500<\/p>\n\n\n\n<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1,00,00,000\nor more&nbsp;&nbsp;&nbsp;&nbsp; &#8211;&nbsp;&nbsp; &nbsp;Rs\n600&nbsp;&nbsp;&nbsp; <\/p>\n\n\n\n<p>In case of late filing\nof application, additional or higher Government fee as mentioned below would be\napplicable in addition to the Normal Fees.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Period of delays<\/strong><\/li><\/ul>\n\n\n\n<p>Up to 30 days&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\n&#8211;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2 times of\nnormal fees<\/p>\n\n\n\n<p>More than 30 days and up to 60 days-&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;4\ntimes of normal fees<\/p>\n\n\n\n<p>More than 60 days and up to 90 days-&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;6 times of normal fees<\/p>\n\n\n\n<p>More than 90 days and up to 180 days-&nbsp; &nbsp;&nbsp;10\ntimes of normal fees<\/p>\n\n\n\n<p>More than 180 days-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12 times of\nnormal fees<\/p>\n\n\n\n<p><strong>Advantages:<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>Company can commence its business or exercise any borrowing\npowers only after getting COB.<\/li><li>Status of Active Company \u2013 if the COB is applied, the Registrar\nhas reasonable cause to believe that the company is carrying on its business or\noperations.<\/li><li>Timely Receiving of Share Subscription amount by the Company\nwhich can help the Company to grow and invest in its projects or working\ncapital.<\/li><li>No Scope of letting the subscribers in making default or on\npayment of capital.<\/li><li>If the Subscription amount is not paid, the company and\ndirectors may be penalised. <\/li><\/ol>\n\n\n\n<p><strong>Time:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>For Companies Incorporated on or after 2.11.2018 &#8211; &nbsp;&nbsp;The Form Inc-22A is required to be filed within\n180 days from the date of incorporation<strong>.<\/strong><\/li><li>However, as soon as the Amount is deposited, company must file\nthe eform inc-22a but not later than 180 days from Incorporation.<\/li><li>Time to be taken for preparing and filing of form by us: at\nleast 2-3 days required for preparing and filing the e form inc-22a<\/li><\/ul>\n\n\n\n<p><strong>Documents required:<\/strong><\/p>\n\n\n\n<p><strong>Prerequisite of Filing the Form<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>Company must be incorporated with Share Capital<\/li><li>Company must open a Current Account<\/li><li>Subscribers to The MOA should deposit the Subscription Amount by\nBank Mode.<\/li><li>&nbsp;Company must <em>filed with the Registrar Form Inc-22\nfor verification of its registered office.<\/em> <\/li><li><em>In the case of a company pursuing objects requiring registration\nor approval from any sectoral regulators such as the RBI, SEBI, etc., the\nregistration or approval, as the case may be from such regulator shall also be\nobtained and attached with the declaration.\u201d.<\/em><\/li><\/ol>\n\n\n\n<p><strong>Attachments required to be attached with form\nINC-20A<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>Certificate of Incorporation.<\/li><li>Subscribers proof of payment for value of shares.<\/li><li>Bank Account statement of Company having all credit entries for receipt of subscription money received from all subscribers to MOA.<\/li><li>Valid payment proof like NEFT \/ IMPS receipts.<\/li><li>Approval certificate by Regulator like RBI\/SEBI if applicable.<\/li><li>Board Resolution Alongwith the declaration by directors.<\/li><\/ol>\n\n\n\n<p><strong>Penalty for\nNot Obtaining Commencement of Business Certificate<\/strong><\/p>\n\n\n\n<p>Penalty Levied on\nCompany: Any company that does not obtain commencement of business certificate\nwithin 180 days of incorporation will be liable for payment of a penalty of\nRs.50,000.<\/p>\n\n\n\n<p>Penalty Levied on\nDirectors: Each of the Directors who have defaulted would be liable for payment\nof a penalty of Rs.1000 per day of default upto a maximum of Rs.1 lakh.<\/p>\n\n\n\n<p><strong>Other Non Monetary\nConsequences of on Filing of Form Inc-20A?<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>Company cannot commence any business or exercise any borrowing powers without applying COB.<\/li><li>Power of Registrar for Company Strike-Off: After 180 days of incorporation, if the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he\/she may initiate action for the removal of the name of the company from the register of companies (i.e. Company Strike-off).<\/li><\/ol>\n\n\n\n<p><strong>Format of Declaration?<\/strong><\/p>\n\n\n\n<p>Director\u2019s Declaration\nFormat<\/p>\n\n\n\n<p>I am authorized by the\nBoard of Directors of the Company vide resolution number ______\ndated________&nbsp; to sign this form and\ndeclare that all the requirements of Companies Act, 2013 and the rules made\nthereunder in respect of the subject matter of this form and matters incidental\nthereto have been complied with. I further declare that:<\/p>\n\n\n\n<p>1. Whatever is stated in\nthis form and in the attachments thereto is true, correct and complete and no\ninformation material to the subject matter of this form has been suppressed or\nconcealed and is as per the original records maintained by the company.<\/p>\n\n\n\n<p>2. All the required\nattachments have been completely and legibly attached to this form.<\/p>\n\n\n\n<p>3. Every subscriber to\nthe MOA has paid the value for shares agreed to be taken by him.<\/p>\n\n\n\n<p>4. The company has filed\nwith the registrar a verification of its registered office as provided in\nsubsection (2) of section 12<\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>Certificate of Commencement of Business The Companies (Amendment) Ordinance 2018 Ministry of Corporate affairs (MCA) is again back with the very important and Much Harder decision of getting the Certificate of Commencement of Business Requirement which was also available in the erstwhile Companies Act, 1956. Effective Date: On 2nd of November, 2018 our President passed [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,8],"tags":[126,127,125],"class_list":["post-297","post","type-post","status-publish","format-standard","hentry","category-company","category-compliance","tag-certificate-of-commencement-of-business","tag-cob-amendment-2018","tag-the-companies-amendment-ordinance-2018"],"_links":{"self":[{"href":"https:\/\/www.ezzus.com\/blog\/wp-json\/wp\/v2\/posts\/297","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ezzus.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ezzus.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ezzus.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ezzus.com\/blog\/wp-json\/wp\/v2\/comments?post=297"}],"version-history":[{"count":4,"href":"https:\/\/www.ezzus.com\/blog\/wp-json\/wp\/v2\/posts\/297\/revisions"}],"predecessor-version":[{"id":314,"href":"https:\/\/www.ezzus.com\/blog\/wp-json\/wp\/v2\/posts\/297\/revisions\/314"}],"wp:attachment":[{"href":"https:\/\/www.ezzus.com\/blog\/wp-json\/wp\/v2\/media?parent=297"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ezzus.com\/blog\/wp-json\/wp\/v2\/categories?post=297"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ezzus.com\/blog\/wp-json\/wp\/v2\/tags?post=297"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}