Cardiff Services

Commencement of Business

Commencement of Business

As per Section 10A of the Companies Act, 2013, every company incorporated in India having a share capital is required to obtain a Certificate of Commencement of Business before starting any business operations or exercising any borrowing powers.

The company must file Form INC-20A with the Registrar of Companies (ROC) within 180 days from the date of incorporation, declaring that:

  • Every subscriber to the memorandum has paid the value of shares agreed to be taken.

  • The company has filed verification of its registered office with the ROC.

The ROC, after due verification, issues the Certificate of Commencement of Business. Without this certificate, the company:

  1. Cannot commence its business activities legally.

  2. Cannot borrow funds or exercise borrowing powers.

  3. May face penalties if it fails to comply within the prescribed timeline.

This provision ensures that companies incorporated are genuine and are not created for unlawful or fraudulent purposes.

Features of Commencement of Business

  • Applicable Companies – Mandatory for all companies incorporated in India with share capital.

  • Time Limit – Form INC-20A must be filed with the Registrar of Companies within 180 days from the date of incorporation.

  • Capital Verification – Declaration to confirm that every subscriber has paid the value of shares agreed at the time of incorporation.

  • Registered Office Proof – The company must have verified its registered office with the ROC before filing for commencement.

  • Certificate from ROC – Business operations or borrowing powers can begin only after receiving the commencement certificate from the ROC.

  • Restriction on Borrowing – No company can raise funds or borrow from banks/financial institutions without obtaining this certificate.

  • Penalty for Non-Compliance – Company and its officers are liable to penalties if the declaration is not filed within the prescribed period.

  • Fraud Prevention – Ensures that only genuine companies with real subscribers and verified offices commence operations.

Documents Required for Commencement of Business (Form INC-20A)

  • Declaration by Directors – A declaration in Form INC-20A verified by a director of the company.

  • Proof of Paid-up Share Capital – Bank statement of the company showing receipt of subscription money from shareholders.

  • Certificate of Incorporation – Copy issued by the Registrar of Companies at the time of registration.

  • Memorandum & Articles of Association (MOA & AOA) – For verification of subscribed capital and company objectives.

  • Proof of Registered Office – Utility bill/rent agreement/ownership proof along with NOC from the owner, if not already filed.

  • Board Resolution – Resolution passed by the Board approving the filing of the declaration for commencement of business.

  • Digital Signature Certificate (DSC) – DSC of a director authorized to sign and submit the form.

Procedure for Commencement of Business

  • Hold the First Board Meeting

    • After incorporation, the company must hold its first Board Meeting within 30 days.

    • Approve opening of a company bank account and authorize directors to receive subscription money.

  • Deposit Subscription Money

    • Every subscriber (shareholder) must deposit the agreed capital into the company’s bank account.

    • Collect the bank statement as proof of deposit.

  • Prepare Necessary Documents

    • Board Resolution approving the filing of INC-20A.

    • Proof of paid-up capital (bank statement).

    • Other supporting documents like MOA, AOA, and incorporation certificate.

  • Filing Form INC-20A

    • The director files the declaration of commencement of business with the Registrar of Companies (ROC).

    • Attach supporting documents and digitally sign using the DSC of the director.

    • A practicing professional (CA/CS/CMA) must certify the form.

  • Verification by ROC

    • The ROC reviews the application and documents.

    • If all requirements are met, the ROC issues a Certificate of Commencement of Business.

  • Start Business Operations

    • After receiving the certificate, the company is legally allowed to commence business and exercise its borrowing powers.

Frequently Asked Questions

A company name search ensures that your chosen business name is unique, legally compliant, and not already registered with Companies House UK. It helps you avoid legal disputes, trademark issues, and confusion in the Cardiff business market.

If your desired name is already registered, you’ll need to choose a different name or modify it. Using a taken name could result in rejection by Companies House or potential legal issues. Our experts can help you brainstorm alternative names that are compliant and market-ready.

It’s not advisable to use a name that’s too similar to another company, especially within the same industry. Similar names can confuse customers and risk trademark disputes. A company name search helps you identify these risks early.

For a company name search in Cardiff, you may need:

  • Proposed company name

  • Business entity type (Ltd, LLP, Partnership, etc.)

  • Jurisdiction (Cardiff / UK)

  • Owner or shareholder details (if applicable)

  • Business description

A “high probability” result means your proposed company name is likely to be available, but further checks are recommended. This is why our detailed Cardiff Company Name Search Report includes both identical and similar names for clarity.

Certain words are restricted under UK law (e.g., “bank,” “insurance,” “government”). If you want to use them, you’ll need special approval from regulatory bodies. We guide you through this process if your Cardiff business requires such terms