Last updated: October 4th, 2024 2:12 PM

Companies (Incorporation) Amendment Rules, 2022 

The Ministry of Corporate Affair (MCA) has notified Companies (Incorporation) Amendment Rules, 2022 to further amend the Companies (Incorporation) Rules, 2014. With this notification, MCA amends the provision related to the application for incorporation of Nidhi Companies and also introduces the Form INC 20A (Declaration for Commencement of Business). This new rule shall come into force on their publication in the Official Gazette. The Companies (Incorporation) Amendment Rules, 2022 is briefly explained in the present article. Know more about the Nidhi (Amendment) Rules, 2022

Insertion of Rule 12 - Application for Incorporation of Companies

Companies (Incorporation) Amendment Rules, 2022 insert Rule 12 in the Companies (Incorporation) Rules, 2014. In Rule 12 (Application for incorporation of companies), the following proviso has been inserted namely: “Provided further that in case of a Company being incorporated as a Nidhi, the declaration by the Central Government under section 406 of the Act shall be obtained by the Nidhi before commencing the business and a declaration on this behalf shall be submitted at the stage of incorporation by the company”

Filing of a declaration as a Nidhi 

According to the Companies (Incorporation) Amendment Rules, 2022, Companies desirous to function as Nidhi must obtain a prior declaration from the Central Government before accepting deposits. The notification about the Companies (Incorporation) Amendment Rules, 2022 is as follows:

New Form INC 20A - Declaration for the Commencement of Business

Companies (Incorporation) Amendment Rules, 2022 is notified the Form No. INC 20A. It is a declaration that needs to be filed by the directors of the company at the time of the commencement of the business. It should be verified by a Chartered Accountant (CA) or Company Secretary (CS) or a Cost Accountant in practice. This is one of the most important compliances to follow as the penalties for non-filing are extremely high.

Laws governing the eForm INC-20A

Form INC-20A is required to be filed Under Section 10A (1)(a) of the Companies Act, 2013 and Rule 23A of the Companies (Incorporation) Rules, 2014.

Section 10A of the Companies Act, 2013

The company incorporated after the commencement of the Companies (Amendment) Ordinance, 2018 and having a share capital shall not commence any business or exercise any borrowing powers unless;

• A declaration is filed by a director within 180 days of the date of incorporation of the company 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
• The company has filed with the Registrar a verification of its registered office
• If any default is made in complying with the requirements of this section, the company shall be liable to a penalty of Rs.50000 and every officer who is in default shall be liable to a penalty of Rs.1000 for each day during which such default continues but not exceeding an amount of Rs.1 Lakh.
• If no declaration has been filed with the Registrar within 180 days from the date of incorporation of the company and the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may initiate action for the removal of the name of the company from the register of companies.

Rule 23A of Companies (Incorporation) Rules, 2014 - Declaration at the time of Commencement of Business

The declaration under section 10A by a director shall be in Form No, NC-20A and shall be filed as provided in the Companies (Registration Offices and Fees) Rules, 2014 and the contents of the form shall be verified by a Company Secretary or a Chartered Accountant or a Cost Accountant in practice: In case of a company pursuing objects requiring registration or approval from any sectoral regulators such as the Reserve Bank of India, Securities, and Exchange Board of India, etc., the registration or approval also be obtained and attached with the declaration

Purpose of the eForm

Form INC-20A is to be filed for Declaration before the commencement of business or exercising borrowing powers.

Companies that are not required to file Form NC-20A

The following companies are not required to file Form NC-20A:

• Companies incorporated before 2 November 2018 ( i.e before the commencement of the Companies ( Amendment) Ordinance, 2018).
• Companies incorporated after 2nd November 2018 without share capital.

Documents required for Form NC-20A

• Subscribers' proof of payment for the value of shares
• Certificate of Registration issued by the RBI (Only in case of Non-Banking Financial Companies) /from other regulators.

The Time Period for filing Form NC-20A

Every company required to file Form NC-20A shall file the same within 180 days of its incorporation.

Applicable Fee

The form filing fee rates are provided as per the Companies (Registration of Offices and Fees) Rules, 2014 Fee for filing e-Forms or documents in case of the company have share capital

Nominal Share Capital	Fee applicable
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

Fee for filing e-Forms or documents in case of a company does not have share capital  The company needs to file the Rs.200 for filing e-Forms or documents in case of the company does not have share capital.

 Additional Fee

Period of delays	All forms
Up to 30 days	2 times of normal fees
More than 30 days and up to 60 days	4 times normal fees
More than 60 days and up to 90 days	6 times normal fees
More than 90 days and up to 180 days	10 times of normal fees
More than 180 days	12 times normal fees

Procedure for Filing eForm INC-20A

The following steps can be used for filing the  Form INC-20A on the MCA portal. The applicant needs to access the official website of the Ministry of Corporate Affairs to file eForm INC-20A. Click here to get the eForm INC-20A. By login into the portal, the applicant can fill in all details in Form INC-20A.

• Details Corporate identity number (CIN) of company
• Director identification number
• Name of the regulator
• Date of approval/registration
• letter number/registration number

Upload Documents

After providing all details, the applicant needs to upload the mandatory documents. By clicking on the attach button, the required document can be uploaded.

Declaration

Enter the serial number and date of board resolution authorizing the signatory to sign, give declaration and submit the eForm

Digitally sign the Form

Only the Director of the company is allowed to sign this eForm. The person should have registered his/her DSC with MCA. If not already registered, then please register before signing this form.

Certificate by practicing professional

This form needs to be verified by a practicing professional. Enter the details of the practicing professional and attach the digital signature.

Submit Form

The Form INC 20A (Declaration for the Commencement of Business) will be auto-approved (STP).

SRN Generation

On successful submission of the eForm INC-20A, SRN will be generated and shown to the user which will be used for future correspondence with MCA.

Challan Generation

On successful submission of the eForm INC-20A, a challan will be generated depicting the details of the fees paid by the user to the Ministry. It is the acknowledgment to the user that the eForm has been filed.

Email

When an eForm is completely processed by the authority concerned, an acknowledgment of the same with related documents, if any, is sent to the user in the form of an email to the email id of the company.