No Commencement of Business Certificate is required for New Companies

The Com­pa­nies (Amend­ment) Act 2015 which Noti­fied on 25th May, 2015 Omit­ted Sec­tion 11 of Com­pa­nies Act 2013 which calls for Busi­ness Com­mence­ment Certificate/ Inti­ma­tion to MCA before com­mence­ment of Busi­ness by a new­ly incor­po­rat­ed com­pa­ny. Time gap for start­ing a busi­ness in India has been reduced by 2–3 Days since Com­mence­ment of Busi­ness cer­tifi­cate is no longer to be tak­en. Ear­li­er it takes 2–3 work­ing days to get com­mence­ment of Busi­ness cer­tifi­cate.

Sec­tion 11 of Com­pa­nies Act 2013 said that-

11. (1) A com­pa­ny hav­ing a share cap­i­tal shall not com­mence any busi­ness or exer­cise any bor­row­ing pow­ers unless—

(a) a dec­la­ra­tion is filed by a direc­tor 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 and the paid-up share cap­i­tal of the com­pa­ny is not less than five lakh rupees in case of a pub­lic com­pa­ny and not less than one lakh rupees in case of a pri­vate com­pa­ny on the date of mak­ing of this 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 which may extend to five thou­sand rupees and every offi­cer who is in default shall be pun­ish­able with fine which may extend to one thou­sand rupees for every day dur­ing which the default con­tin­ues.

(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.

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