Commencement of business for Private and Public Limited Company under Companies Act 2013

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The Companies Act 2013 does not make any distinction between a public limited company or a private limited company for the requirement of commencement of business. It is pertinent to note that as per old Companies Act, 1956 the requirement to obtain certificate of commencement of business was not applicable to private limited companies under section 149(7)(a).

Section 11 of the Companies Act 2013 gives the provisions regarding commencement of business which requires every company to file the following two declarations mandatorily before commencing any business or exercising any borrowing powers:
(a) Form INC-21-Declaration for payment of paid up share capital; and
(b) Form INC-22-Declaration regarding verification of its registered office

Form INC-21 Declaration for receipt of paid up share capital
As per section 11(1)(a), after incorporation, a director of the company is required to file a declaration in Form INC-21 duly certified by a practicing professional to the effect 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 fivel akh rupees in case of a public company and not less than one lakh rupees incase of a private company on the date of making of this declaration.

If the Form INC-21 is not filed with the Registrar 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 initiate action for the removal of the name of the company from the register of companies.

Where the affairs ofthe Company is regulated by any sectoral regulator like RBI in case of NBFC, certificate of registration with such regulator is also required to be attached to form INC-21.

Also specimen signature of all the subscribers to MOA duly verified by respective bankers in form INC-10 is to be attached to form INC-21.

Form INC-22 Declaration regarding verification of its registered office
Under section 12(2) of the Companies Act, 2013, companies have been given a time of fifteen days to have a registered office address and a total period of thirty days from the date of incorporation to file the verification of its registered office. The verification is to be filed in Form INC-22 (if not already filed at the time of the incorporation itself)