For a company in India, both Certificate of Incorporation and Certificate of Commencement of Business are extremely important legal documents. The Certificate of Incorporation, on one hand, serves as legal proof that the company has been legally incorporated and registered with ROC.
The Certificate of Commencement of Business, on other hand, confirms that company has fulfilled the required conditions to start its business operations. Now, you know the basic difference between these two certificates. But to understand their differences in detail, we recommend you read this blog post till the end.
The Certificate of Incorporation, also known as the Company Registration Certificate, is a legal document issued to a company by the ROC to confirm that the company has been legally incorporated and registered. It is issued at the end of the company registration process. This certificate contains a unique Corporate Identification Number, which is a unique 21-digit number that serves as the identity of company.
To obtain company incorporation certificate, the SPICe+ form has to be filed through MCA portal along with important company details and required documents. Once registration process is completed and then finally approved, the ROC moves forward to issue Certificate of Incorporation to incorporated entity. This certificate also showcases that company is a separate legal entity from its shareholders.
The Certificate of Commencement of Business, sometimes simply known as Certificate of Commencement, is a legal document issued by ROC to confirm that a newly incorporated company has fulfilled the required conditions to start its business operations. It is not issued during incorporation but after company has been incorporated and has completed required compliance.
To obtain this, the company must file the required declaration Form INC-20A with ROC within 180 days of incorporation. Without this certificate, the company cannot commence any business or exercise borrowing powers. So, obtaining this certificate within prescribed time must be a priority for each and every newly incorporated company.
In the table below, we have highlighted the major differences between certificate of incorporation and certificate of commencement of business:-
| Parameter | Certificate of Incorporation | Certificate of Commencement of Business |
|---|---|---|
| Definition | It is a legal document that confirms the company has been legally incorporated as well as registered. | It is a legal document that confirms company has fulfilled required conditions to commence its business and exercise its borrowing powers. |
| Issued By | It is issued by ROC, an office under MCA. | It is also issued by ROC. |
| Form | To obtain incorporation certificate, the applicant must file SPICe+ form. | To obtain commencement certificate, the applicant must file Form INC-20A. |
| Process | Online via MCA portal during company registration process. | Online via MCA portal after the company has been incorporated and registered. |
| Timeline | Issued upon approval of company registration application by ROC. | Must be filed within 180 days of incorporation. |
| Governing Law | Companies Act, 2013. | Companies Act, 2013. |
| Serves as Proof of | Legal incorporation and existence of the company. | Fulfilment of requirements to commence business and exercise borrowing powers. |
After going through this blog post, we’re sure that now you know the basic differences between Certificate of Incorporation vs Certificate of Commencement of Business. The first certificate confirms legal incorporation and existence of the company while the second one confirms that the company has fulfilled required conditions to commence its business. Both the certificates have their own importance. They are issued at different stages of company’s journey. Therefore, a company should make sure to complete required process and compliances within prescribed time to secure them.
For assistance in registering a company or in fulfilling post-registration compliance requirements with ease, you can reach out to our experienced company registration consultants at Registrationwala.
Q1. Which form do I need to file to obtain business commencement certificate from ROC?
A. To obtain business commencement certificate from ROC, you must file Form INC-20A. Make sure to file this form within 180 of company incorporation.
Q2. Which form do I need to file to secure certificate of incorporation for a private limited company?
A. To secure certificate of incorporation for a private limited company, you need to file SPICe+ form with the ROC.
Q3. What is the purpose of SPICe+ form?
A. It is filed with MCA to legally incorporate and register a company in India.
Q4. What is the purpose of INC-20A form?
A. It is filed with MCA to get ROC’s approval to commence business and exercise borrowing powers.
Hi, I'm Sachin Chawla. I’m a commerce graduate from Agra University and a Chartered Accountant (2015) with DISA certification. I focus on helping businesses with formation, management, tax and FEMA matters, business licenses and regulatory compliance, IP advisory, risk management and auditing among others. Through my articles, I aim to share my expertise and provide practical guidance in these areas.
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