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start of business

start of business

 

(Commencement of Business) According to the Companies Act, 2013, any share capital company can start its business or borrow any amount only when it fulfills the following formalities 1. Declaration by one of the directors of the company that

 

has been declared that every subscriber to the memorandum has agreed to share

 

have paid their price. This declaration should be made in the prescribed manner along with the prescribed fee and should be filed with the Registrar. 2. Declaration in respect of paid-up capital In the case of a private company, a director is also required to declare that the paid-up share capital of the company is not less than ` one lakh or more than the prescribed amount on the day of such declaration. In the case of a public company, one of its directors has to declare that his paid-up share capital is not less than ₹ 5 lakh or more on the date of such declaration. instead of

 

3. Approval from the concerned regulatory body- If it is mandatory for the company to register with any other regulatory body related to it like Reserve Bank, SEBI etc., then the company should get approval from them. The company can start its business only after obtaining such approval.

 

4. Certification of Registered Office The company also has to get the certification of its registered office done before starting the business.

 

If the business is started by the company by making a mistake in complying with the above provisions, then the company can be fined up to ₹ 5,000. In addition, a fine of up to ₹ 1,000 per day may be imposed on each of the company’s defaulting rights for as long as such default continues.

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