Friday, June 5, 2015

No need to File Commencement of Business Form INC-21

As we all are aware that with new Companies Act, 2013 a new form INC-21 was made mandatory to be filed before the commencement of business or Exercising Borrowing power by the Company. This form was made mandatory for Private Companies also, due to which Commencement which was not required to be taken earlier under Companies Act, 1956 by the Private Companies were applicable on them too.

The Relevant Rule 24 of Companies (Incorporation) Rules, 2014 is given below:

"24. Declaration at the time of commencement of business.-
The declaration filed by a director shall be in Form No.INC.21 along with the fee as and the contents of the form shall be verified by a Company Secretary in practice or a Chartered Accountant or a Cost Accountant in practice: Provided that in the case of a company requiring registration from sectoral regulators such as Reserve Bank of India, Securities and Exchange Board of India etc, the approval from such regulator shall be required. "

With the Companies Incorporation (Second) Amendment Rules, 2015, the same is omitted from now on and no Company is required to file INC-21. The relevant portion of the rule is given below:

"2. In the Companies Incorporation Rules, 2014: b) rule 24 shall be omitted"

So Happy Company Formation to all the Entrepreneurs and Professionals.

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  1. Plz reply for those companies which are registered before 31.03.2015, INC-21 is mandatory to file or not? Plz reply on

    1. Hi Ashish,

      Nothing specific was told in the Rules for cases before the Amendment but since whole point is omitted and no option for filing INC-21 is available, therefore INC-21 is not required to be filed.

  2. Replies
    1. Hi Abhishek

      Answer given to the query of Ashish. Hope you are satisfied now.