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    Company Incorporation

    Posted By : Sachin / Published on : 09-Apr-2022 12:44 PM / View : 78 / Comment : 1
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    Hello All,

    Will my company account get freezed if I didnt take INC 20A : Commencement of Business within 1 year of company incorporation?
    Read more on : incorporation company

    • Hi Sachin,

      Greetings!

      Pursuant to Section 10A(1)(a) of Companies Act, 2013, 

      (1) A company incorporated after the commencement of the Companies (Amendment) Ordinance, 2[2019] and having a share capital shall not commence any business or exercise any borrowing powers unless—

      (a) a declaration is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in FORM INC-20A and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration;

      That means INC-20A shall be filed to ROC before Commencement of business but not later than 180 days from the date of Incorporation of the company.

      Where a Company fails to comply with the above provision, the consequences pertaining to the below provision shall apply:

      Section 10A(2): Company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees.

      Section10A(3): Further, where the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may, without prejudice to the provisions of sub-section (2), initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.

      Therefore, the bank account of company could not be freezed but ROC may initiate action for the removal of the name of the company from the register of companies, which ultimately results in closure of Bank account.

      21-04-2022 / 05:53:56 AM
      Reply



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