Amended and updated notes on section 10A of Companies Act 2013. Detail discussion on provisions and rules related to commencement of business etc.
Chapter II (Sections 3–22) of the Companies Act, 2013 (CA 2013) deals with the provisions related to incorporation of company and matters incidental thereto. Section 10A of CA 2013 provides for commencement of business etc.
Recently, we have discussed in detail section 10 (Effect of memorandum and articles) of CA 2013. Today, we learn the provisions of section 10A of Companies Act 2013 read with the Companies (Incorporation) Rules, 2014.
Section 10A of the Companies Act, 2013 has been inserted the Companies (Amendment) Act, 2019 with effect from 2nd November, 2018 i.e. the commencement date of section 10A is 2-11-2018.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | II |
| Chapter Name | Incorporation of Company and matters incidental thereto |
| Section No. | 10A |
| Section Name | Commencement of business etc. |
| Monthly Updated Edition | Company Law PDF |
Section 10A of Companies Act 2013: Commencement of business etc.
Section 10A inserted by the Companies (Amendment) Act, 2019 w.e.f. 2nd November, 2018.
(1) A company incorporated after the commencement of the Companies (Amendment) Act, 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 such form 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; and
- (b) the company has filed with the Registrar a verification of its registered office as provided in sub-section (2) of section 12.
(2) If any default is made in complying with the requirements of this section, the 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.
(3) Where no declaration has been filed with the Registrar under clause (a) of sub-section (1) within a period of one hundred and eighty days of 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, 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.