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 main global players of the 21st century. However, despite the strong economic growth and the rapid and profound changes the country is undergoing, this is a market not easy to understand: for this reason, before you can access it Need to have a close understanding of local business dynamics.

A Important and recent news concerns the Reintroduction of the obligation to declare business commencement: If at first, in 2015, the so-called Declaration of Commencement had been repealed, through the Companies Amendment Ordinance such a statement is again reintroduced by the Ministry of Corporate Affairs local. The Indian government was prompted to backtrack by the trend of shareholders failing to pay their capital contributions into company current accounts, which has been observed since the obligation was abolished in 2015.

The Companies Amendment Ordinance requires companies that are incorporated after November 2, 2018, to Submit a Declaration of Commencement of Business through the 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, you need to submit:

• the proof of payment on the company's current account for incorporation fees By members;
• the Approval process 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 50,000 INR (approx. €620);
• fine to each individual member of 1,000 INR per day (approx. €13) for each day of delay in making the payment, up to a maximum of 100,000 INR (approx. €1240);
• removal from the Registrar of Companies, in the event that, after 180 days, there is “reasonable doubt” that the company is not carrying out any activity.

For companies that want to approach the Indian market. it is appropriate 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 capable of supporting your company in the realization of 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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