The Companies (Amendment) Ordinance, 2018 promulgated on November 02, 2018 has inserted new section 10 A to provide for a declaration by a company having share capital before it commences its businesses or exercises borrowing power.
Provision for Time Limitation and Penalty on Directors
A 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 a period of 180 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
- The Company has filed with the Registrar a verification of its registered office as provided in sub-section (2) of section 12.
- If any default is made in complying with the requirements of this section, the company shall be liable to a penalty of Rs. 50,000 and every officer who is in default shall be liable to a penalty of Rs. 1,000 for each day during which such default continuous but not exceeding an amount of Rs. 1,00,000.
Where no declaration has been filed with the Registrar under clause (a) of sub-section (1) within a period of 180 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.
Fees structure to obtain Commencement of Business Certificate:
|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|
Non-compliance of by an officer in default shall result in liability to a penalty instead of fine.
|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 of normal fees|
|More than 60 days and up to 90 days||6 times of normal fees|
|More than 90 days and up to 180 days||10 times of normal fees|
|More than 180 days||12 times of normal fees|
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