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CS Executive · Setting Up of Business, Industrial and Labour Laws · Identifying Laws applicable to various Industries and their Initial Compliances

Tanvi Pharma Pvt Ltd was incorporated on 1 March. The subscribers to the memorandum have paid the share capital. Which initial compliance is a statutory requirement after incorporation under the Companies Act, 2013 in respect of the subscribers' capital?

A company with share capital must file a declaration of commencement of business, Form INC-20A, within 180 days of incorporation. It confirms that every subscriber has paid for the shares agreed to be taken. No Registrar certificate of commencement is issued under the current law.

  1. AThe company must file a declaration for commencement of business (Form INC-20A) within 180 days of incorporation, after subscribers have paid the value of shares agreed to be takenCorrect
  2. BThe company must file a prospectus with SEBI within 30 days
  3. CThe company must hold a statutory meeting within 60 days and file a statutory report
  4. DThe company must obtain a certificate of commencement from the Registrar within 15 days

Explanation

A company having share capital cannot commence business or exercise borrowing powers until the declaration is filed within 180 days, confirming every subscriber has paid the value of shares agreed to be taken. A prospectus and statutory meeting are not required for a private company, and no Registrar-issued commencement certificate exists under the current regime. A common mistake is to think the old certificate system still applies.

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