Author Profile

Legal India

Posted On by &filed under .


A private company or a company having no share capital can commence its business immediately after it has been incorporated. However, other companies can commence their activities only after they have obtained Certificate of Commencement of Business. For this purpose, the following additional formalities have to be complied with :-

1. If a company has share capital and has issued a prospectus, then :-

Shares upto the amount of minimum subcription must be alloted

Every director has paid to the company on each of the shares which he has taken the same amount as the public have paid on such shares

No money is or may become payable to the applicants of shares or debentures for failure to apply for or to obtain permission to deal in those shares or debentures in any recognised stock exchange.

A statutory declaration in Form 19 signed by one director or the employee – company secretary or a Company secretary in whole time practice that the above provisions have been complied with must be filed

2. If a company has share capital but has not issued a prospectus, then :-

It must file a statement in lieu of prospectus with the Registrar of Companies

Every director has paid to the company on each of the shares which he has taken the same amount as the other members have paid on such shares

A statutory declaration in Form 20 signed by one director or the employee – company secretary or a Company secretary in whole time practice that the above provisions have been complied with must be filed

Once the above provisions have been complied with, the Registrar of Companies grants “Certificate of Commencement of Business” after which the company can commence its activities.


Leave a Reply

Be the First to Comment!

Notify of
avatar
wpDiscuz