The Registrar of Companies (ROC), Delhi, under the Ministry of Corporate Affairs, has imposed penalties for violation of Section 10A of the Companies Act, 2013. This case highlights why filing Form INC-20A before commencing business is mandatory and the consequences of non-compliance.
Legal Provisions Explained
- Section 10A(1): Requires filing of Form INC-20A within 180 days of incorporation before starting business or borrowing funds.
- Section 10A(2): Penalty for non-compliance: Company ₹50,000; Officers ₹1,000 per day (max ₹1,00,000).
- Section 446B: Provides reduced penalties for small companies and OPCs.
Case Summary: Badli Logistics Pvt Ltd
Company Details: CIN U45309DL2021PTC379817; Incorporated on 09.04.2021; Directors >> Sameer Harjai & Jiten Masand.
The company took an unsecured loan of ₹3.5 crore on 19.05.2021 before filing INC-20A on 20.08.2021, violating Section 10A. The gap between commencement and filing was 93 days.
Penalty Details
| Entity | Penalty Amount |
| Badli Logistics Pvt Ltd | ₹25,000 |
| Sameer Harjai (Director) | ₹46,500 |
| Jiten Masand (Director) | ₹46,500 |
Penalties must be paid within 90 days via MCA e-Adjudication portal. Appeals can be filed within 60 days in Form ADJ.
Compliance Tips to Avoid Penalties
- File INC-20A within 180 days of incorporation.
- Do not borrow or commence business before filing INC-20A.
- Maintain accurate disclosures in financial statements.
- Use MCA portal for timely compliance and avoid penalties.
Key Takeaways
Early commencement without INC-20A filing can lead to heavy penalties and reputational risks. Ensure timely compliance to maintain corporate governance and avoid legal consequences.
Additional Guidance
If you face similar issues, consult a corporate compliance expert and regularly monitor MCA notifications. Non-payment of penalties within the prescribed time can attract further penal consequences under Section 454(8).