COMMENCEMENT OF BUSINESS

Section 11 of Companies Act, 2013

COMMENCEMENT OF BUSINESS:

1. A company having share Capital shall commence its business nd borrowing powers only:

- after filing declaration by the director in Form INC- 21.

- Directors should ensure that subscribers of MOA has paid the value of shares agreed to be taken by him.

- further ensure that the company has filed Form INC-22 within prescribed time of its Incorporation.(i.e., filing verfication of registered office)

- if company requiring registration from regulators like RBI, SEBI, IRDA etc., such approval should be obtained.

2. Such declaration in Form INC - 21 should be filed within 180 days from the date of incorporation.

3. In case of default in filing, Registrar can take action under sec. 248 of companies act, 2013 to remove the name of the company (striking off)  from the Register of Companies.

Note:

** section 11 applies both public and private limited companies having share capital.

** Registrar can take action to remove name of the company u/s.248:

- when company fails to commence its business within one yr of its incorporation, or

- does not compiled sec. 11(1)  (i.e., default in filing INC- 21 within 180 days of its incorporation)