India: declaration of start-up becomes mandatory for new companies

India is a country of great opportunities which has set itself the ambitious goal of increasing its importance among the major global players of the 21st century. However, despite the strong economic growth and the rapid and profound changes the country is undergoing, it is a market not easy to understand: for this reason, before it can be accessed, it is Need to have a close understanding of local business dynamics.

A important and recent news concerns the Re-introduction of the requirement for businesses to declare the start of their activities: If at first, in 2015, the so-called Declaration of Commencement had been repealed, through the Companies Amendment Ordinance such a statement is again reintroduced by the Ministry of Corporate Affairs local. What prompted the Indian government to retrace its steps was the trend of nonpayment of incorporation contributions to the current accounts of companies by members that has been recorded since the obligation was lifted in 2015.

The Companies Amendment Ordinance requires companies that are incorporated after November 2, 2018, to Submit a declaration of commencement of activities through digital form INC 20A at the Registrar of Companies Local within 180 days from the date of establishment, and prohibits any activity before this obligation has been fulfilled.

To fill out the digital form, it is necessary to submit:

• the proof of payment on the company's bank account of the incorporation fees By members;
• the evidence of obtaining approval By industry regulators.

La non-delivery of this form, within the set limit of 180 days from the date of establishment, entails the following penalties:

• fine to the company Of INR 50,000 (about €620);
• fine to each individual member of INR 1,000 per day (about €13) for each day of delay in complying with the payment, up to a maximum of INR 100,000 (about €1,240);
• removal from the Registrar of Companies, if, after the 180 days has passed, there is “reasonable doubt” that the company is not carrying out any activity.

For companies that want to approach the Indian market. it is advisable to rely on experts who know it thoroughly: Octagona, thanks to its 17 years' experience in the market, its direct offices in New Delhi, Pune and Bangalore and its team of Italian and Indian experts, Is able to support your company to implement successful projects in the Subcontinent.

For more information, please contact us at 059.9770184 or send an e-mail to the address [email protected]: you will receive all the information you need.

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