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Microlesson · 5-min read

Declaration for Commencement of Business (Section 10A)

## Commencement of Business (Sec 10A)

### Director's Declaration

A director shall file a declaration within 180 days of incorporation stating that:

  • All subscribers to the MOA have paid the agreed value of the shares they subscribed to.

### Verification of Registered Office

The company shall also file verification of its registered office with the ROC, as required under Sec 12.

### Verification by Professionals

The declaration shall be verified by a CS / CA / CMA in practice.

### Special Entities (Sectoral Regulators)

For companies requiring approval from sectoral regulators (e.g., RBI, SEBI), the relevant approval or registration shall also be attached with the declaration.

### Penalty for Default

DefaulterPenalty
Company₹50,000
Officers₹1,000 per day, up to a maximum of ₹1,00,000

### Failure to Submit Declaration — ROC's Action

If no declaration is filed within 180 days and the ROC believes the company is not operating, the ROC may initiate action to remove the company from the register under Chapter XVIII.

### Summary at a Glance

  • Time limit: 180 days from incorporation
  • Pre-condition: Subscribers have paid up
  • Verification: by CS/CA/CMA in practice
  • Sectoral approval: if applicable (RBI/SEBI)
  • Consequence of default: Fine + possible strike-off

Worked example

### Example 1

Example 1: ABC Ltd. was incorporated on 1 April. The directors have not filed the commencement declaration even by 1 December (240 days). Answer: (1) Company penalty ₹50,000; (2) Each officer in default = ₹1,000 × 60 days (excess) = ₹60,000 (within ₹1 lakh cap); (3) ROC may initiate strike-off under Chapter XVIII.

### Example 2

Example 2: A newly incorporated NBFC has obtained RBI registration. What additional document must be attached with the commencement declaration? Answer: The RBI registration certificate must be attached.

⚠️ Common exam mistakes

  • Forgetting the 180-day window — counting from another date.
  • Forgetting professional verification by CS/CA/CMA in practice is mandatory.
  • Missing sectoral regulator approval attachment for regulated entities (NBFCs, brokers, etc.).
  • Not knowing that strike-off under Chapter XVIII is a real consequence.
Reference: Section 10A — Companies Act, 2013
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