According to the Companies Act of 2013, a company’s incorporation date cannot be the same as its first business transaction or business commencement date.When Can a Private Limited Company Commence Business.
When Can a Private Limited Company Commences Business?
The Registrar of Companies must issue a certificate of commencement of business before a public or private limited company with share capital can begin doing business.
In order to conduct business or exercise its borrowing rights, the new company must follow the appropriate procedures to obtain the certificate of commencement of business (COB) as soon as possible after it has been established.
Under The Companies (Incorporation) Rules, 2014, Form No. lNC-20A shall be used for the Company declaration and shall be filed in accordance with the Corporation (Registration Offices and Fees) Rules, 2014. The form shall be verified by the company secretary, a chartered accountant, or a cost accountant in practice. If the company pursues objectives that require registration or permission from authorities such as the Reserve Bank of India, Securities and Exchange Board of India, or others, it must obtain registration or approval and attach it to the declaration.
That means only companies that comply with Section 11 of the Companies Act, 2013 can start a business or borrow money.
- A Within 180 days of the signing of the memorandum of association, the director must file a declaration with the Registrar stating that each subscriber to the memorandum has paid the value of the shares agreed to be taken by him and that the company’s paid-up share capital has not dropped below five lakh rupees in the case of a public company and not below one lakh rupees in the case of a private company on the date of filing the declaration..
- In accordance with section 12, sub-section (2), the company must provide verification of its registered office to the Registrar as proof.
As part of the registration process, the company must provide the Registrar with verification of its registered office in Form No. INC.22 with the following attachments within 30 days of its incorporation:
(a) Registered document showing ownership of the registered office in the name of the company;
(b) A notarized copy of the lease or rental agreement in the name of the company, along with a copy of the receipt for rent paid up to one month before the start of the lease;
(c) A letter of authorization from the owner or occupant of the premises confirming that the company uses the premises as its registered office; and
(d) Proof of the availability of a utility service, such as phone, gas, electricity, etc. at the address of the premises in the name of the owner, or a current utility bill, which should not be older than two months.