A company, registered under The Companies Act, 2013, is required to file a declaration of commencement of business before starting operations. The directors ignore this obligation, and the firm commences business activities without filing the declaration. How much penalty can be imposed on the company by the Reg- istrar concerned for such non-compliance ? 71
Explanation & Strategy
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Under Section 10A of the Companies Act, 2013, a company must file a declaration of commencement of business within 180 days of incorporation. Failure attracts a penalty of Rs.50,000 on the company. This ensures companies actually begin operations after incorporation rather than remaining dormant shells.