When you want to start a business, there are many documents that need to be prepared and submitted for verification by the government to get approval. One such document is the Certificate of Business which is required for all newly integrated private and public companies that have share capital. Generally, the certificate of commencement of business must be taken before the commencement of the business from the concerned registrar of companies.
The certificate of commencement of business is called Form 20A, which is the declaration every director of the companies required in order to file the documents with the Registrar. This document is acquired from the local municipal authority to show that the permit has been given to the owner of a company to commence a project. The commencement certificate, in short, mentioned as CC will be granted to the owner only when he/she has met the legal requirements and has applicable sanctions.
What is form 20A?
The declaration for the commencement of business is named Form 20A. This document is a declaration that has to be submitted by the director of a company to commence the business. This document must be verified by a chartered account or a company secretary or even by a cost accountant who is in practice. All the companies registered on or after November 2 2018 must file the certificate of commencement according to the Companies Ordinance 2018. This document of 20A should be filed within 180 days of the date of incorporation of the company. Any company that has not filed this declaration document will have to pay a very high penalty.
What is Commencement of Business Certificate?
This is a document to state that the director of an upcoming business has been given the authority to commence the business. The commencement of a business certificate is compulsory for all the newly introducing companies in India according to the Companies (Amendment) Ordinance 2018. This business certificate must be filed before the commencement of the business and working out the borrowing powers by the company. Besides, the company should also meet the terms of Section 10A (1) (a) of the Companies Act 2013 and the Companies Rules 2014.
Which companies require a certificate of commencement of business?
All the newly launched companies after November 2nd, 2018, and any upcoming projects of business after this mentioned date must require a certificate of commencement of business. The companies that do not need this declaration form are those incorporated before the 2nd Nov 2018 and the companies incorporated after this date that does not have any share capital.
What are the steps involved in obtaining the commencement of business?
Prior to understanding the steps to obtain the commencement of business, you must know about the documents and other information that are required for the form. See the list below.
- Name of the company
- Corporate Identification Number of the company
- Address of the registered office
- Email id of the company
- You need to attach the subscribers’ proof of payment for value shares. The certificate of registration issued by RBI or other concerned regulators and any other attachments that are needed for your business.
Before filing the For 20 A, you must make sure that the certificate of commencement should be certified by any practicing professional such as a company secretary/cost accountant in practice/chartered accountant in practice. Read more to find the procedures in attaining the commencement of business certificate.
- Visit the website of MCA Portal first
- After accessing the website, you can find the MCA Services tab on top of the home page of the Ministry of Corporate Affairs. Click on that tab
- Select Company form download
- A new screen can be seen now that shows the company forms. You must scroll down to see Form INC -20a which is the declaration for the commencement of business. Select that option
- Now you have the downloaded form on your device. Keep in mind that you can either download only the form you can choose to download the form with the instruction kit
- Now, open the downloaded form in PDF
- Start filling the form correctly with accurate details
You will be asked to fill in the details such as CIN of the company, Name of the company, Address of the registered office, email id of the company, and select if the company’s affairs are regulated by a sectoral regulator or not.
- After filling in the details, scroll down, and you can see the attachment section
- Click on Attach button against each detail and select the file from your device
- Read the declaration and fill it along with the DIN
- You must also enter the information of the practicing professional who should certify the form.
- After you have completed filling in all the details in the form, click on the Check Form button. The system will automatically conduct the validation of the form
- Click on the Pre Scrutiny button which will be enabled when the validation is successful
- Add your digital signature of the Director of the company and the certifying professional
- Now visit the MCA portal again and log in.
- Click on the MCA Services tab and click on Upload E-forms
- Upload the form you have filled and proceed to the payment section.
- Upon successful payment, the SRN will be created.
How to download certificate of commencement of business?
You can easily download the certificate of commencement of business online. You do need anybody else’s help in getting the form 20 A.
- You must visit the website of the Ministry of Corporate Affairs – Government of India and select the MCA Service tab seen on the home screen.
- Under this tab, you will find many options to choose from, but you must click on the option Company Form Download under the e-Filing section.
- When another page appears on the screen, select the Declaration for Commencement of Business (with or without the instruction kit).
- If you are trying this for the first time, then we suggest downloading the form with the instruction kit for your reference.
Hope this guide on the Certificate of Commencement of Business has given you ample information regarding the declaration form and how to download the certificate of commencement of business with a few simple steps.
Significance of Form 20A
You should never fail to file this certificate since there can be many consequences that you have to face if the filing of Form 20 A is not done. Any company that has not filed that certificate will have to pay a penalty of INR 50,000. Moreover, every office in default will be liable to pay INR 1000 per day till they file this document. But the penalty shall not be more than one lakh.
Besides if the registrar finds reasonable reason to believe that a company is not carrying on any kind of business, then he/she can remove the name of the company from the Register of Companies. This business certificate is an auto-approved form and without this form 20a, a business or a company cannot start their project and they cannot even exercise borrowing powers. So, understand the significance of filing this form with the Ministry of Corporate Affairs (MCA).