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What is Commencement of Certificate of Business?

What is Commencement of Certificate of Business?

There used to be a Certificate of Commencement of Business. While it wasn’t discontinued, it was not put into full force until the Companies (Amendment) Ordinance of 2018. Under this certificate, until and unless the company has filed a declaration within 180 days of company registration, it won’t be able to commence the business. This declaration states the all the shareholders of the company have paid the values of shares as was stated in the MOA. Let us take a look into format of this declaration, the documents that are needed to be providing along with the declaration, the fees of submission and the penalty of not complying.

Format

I am authorized by the Board of Directors of the Company through resolution number ______ dated________  to sign this form and thereby declare that all the requirements of Companies Act, 2013 and the Company Ordinance amendment (2018) and the rules made there under in respect of the subject matter of this form and matters incidental thereto have been complied with. I further declare that:

1. Whatever is stated in this form and in the attachments thereto is true, correct and complete and no information material to the subject matter of this form has been suppressed or concealed and is as per the original records maintained by the company.

2. All the required attachments have been completely and legibly attached to this form.

3. Every subscriber to the MOA has paid the value for shares agreed to be taken by him.

4. The company has filed with the registrar a verification of its registered office as provided in subsection (2) of section 12

Documents that have to be attached along with

  1. COI of the company
  2. Pan of the company
  3. List of the directors and shareholders of the company
  4. Bank statements of the Directors and Shareholders of the company
  5. ID proofs of the same.
  6. Receipt proof (if any)

Fee structure of the share certificate

The fee structure of the share structure certificate is the following:

Share capital involved

Fee to be paid

Less than 1,00,000

Rupees 200

1,00,000 to 4,99,999

Rupees 300

5,00,000 to 24,99,999

Rupees 400

25,00,000 to 99,99,999

Rupees 500

1,00,00,000 or more

Rupees 600

What if you don’t comply to the declaration

If you don’t file the declaration in the prescribed format, then the penalties are as follows:

  1. Penalty on the company: There is a penalty of 15000 rupees if the directors don’t file the declaration
  2. Penalty on directors: The defaulted directors have to pay a penalty of INR 1000 per day after the 180 day limit is passed. This can reach up to INR 1 lakhs
  3. Company removal:  If the registrar has a reasonable cause after the 180 day of incorporation, then he can also strike off the company from the companies register.

Not filing the declaration can be a scary matter, and is a hassle. Therefore, in order to get relief from this hassle, you can get in touch with Registrationwala and we can ensure that your company is registered and your commencement declaration is filed.

 

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