The Companies (Amendment) Bill 2019 was introduced on 12th January 2019 to replace the Companies (Amendment) Ordinance 2018 which was effective from 2nd November 2018. As per the Amendment there are certain rules and provision which has introduced.
WHAT IS CERTIFICATE OF COMMENCEMENT OF BUSINESS ?
- A certificate of incorporation is a legal document relating to the formation of a company or corporation. It is a license to start any business or corporation which is issued by Registrar of Company
- Obtaining a Certificate of Commencement for Company (Private, Public, OPC, Nidhi, Section 8) has become mandatory after the Companies (Amendment) Bill 2019.
WHAT ARE THE FORMALITIES TO BE PROVIDED FOR CERTIFICATE OF COMMENCEMENT OF BUSINESS ?
For applying towards Certificate of Commencement of Business, company has to provide two declarations to Registrar of Companies.
1.PAID-UP CAPITAL HAS BEEN RECEIVED BY COMPANY :
- A declaration is filed by director that every subscriber/ shareholder of the company has paid the value of shares agreed to be taken by him/her during incorporation.
- The declaration has to be filed within a period of 180 days from the date of incorporation.
2. VERIFICATION OF REGISTERED OFFICE ADDRESS :
- A declaration in FORM INC-22 for verification of Registered office address shall be filed with Registrar of Companies stating the principal place of business of company.
- A proof of evidence for registered office address shall also be provided with the Form
- The above provision must be complied as per sub-section (2) of section
WHO WILL VERIFY THE DECLARATION MADE BY DIRECTOR ?
The declaration made by director shall be verified by a Company Secretary, or a Chartered Accountant or a Cost Accountant in practice.
In the case of a company requiring registration from sectoral regulators such as Reserve Bank of India, Securities and Exchange Board of India the approval from such regulator shall be required.
IS CERTIFICATE OF COMMENCEMENT OF BUSINESS REQUIRED FOR COMPANY NOT HAVING SHARE CAPITAL ?
The Certificate of Commencement of Business is not required for public company or private company which is not having share capital, hence they are not required to comply with any other formalities and may commence its business activities immediately after obtaining the certificate of incorporation
WHAT ARE THE CONSEQUENCES FOR NOT OBTAINING THE CERTIFICATE OF COMMENCEMENT OF BUSINESS ?
The consequence for non-filing or delay in filing declaration may attract heavy penalty and removal of name of the company.
1. PENALTY :
If any default is made in complying with the requirements of this section, the company shall be liable to a penalty which may extend to five thousand rupees and every officer who is in default shall be punishable with fine which may extend to one thousand rupees for every day during which the default continues.
2. REMOVAL OF NAME FROM REGISTER OF COMPANIES :
Where no declaration has been filed with the Registrar within a period of 180 days of the date of incorporation of the company and the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may, initiate action for the removal of the name of the company from the register of companies.
BOARD RESOLUTION FORMAT FOR COMPANY
CERTIFIED TRUE COPY OF THE RESOLUTION PASSED IN THE MEETING OF THE DIRECTORS OF <COMPANY NAME> HELD ON MONDAY, 08TH DAY OF OCTOBER, 2018 AT 11 A.M. AT THE REGISTERED OFFICE OF THE COMPANY AT <ADDRESS OF COMPANY>
“RESOLVED THAT pursuant to Section 10A of the Companies Act 2013, confirmation from the Board of Directors of the Company be and is hereby given that the Company has received the Subscribed money towards the Subscribed Capital of Rs. 5,00,000/- [Rupees Five Lakh Only].
RESOLVED FURTHER THAT the Draft of the Declaration in the Form INC-21 made in accordance with the provisions of Section 10A of the Companies Act, 2013, as placed before the Board duly initiated by the Directors for the purpose of identification be and is hereby approved and that the same be delivered to the Registrar of Companies, Mumbai for obtaining the Certificate of Commencement of Business.
“RESOLVED FURTHER THAT Mr. <DIRECTOR Name>, Director of the Company, be and is hereby authorized to sign the resolution and declaration and digitally sign e-Form INC-21A and file the same with Registrar of Companies, Mumbai”.
CERTIFIED TRUE COPY
For <NAME OF THE COMPANY>