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Section 11.Commencement of business, etc.
Effective from 01-04-2014 to 29-05-2015

(1) A  having a share capital shall not commence any business or exercise any borrowing powers unless—

(a) a declaration is filed by adirector in such form and verified in such with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him and the paid-up share capital of the company is not less than five lakh rupees in case of a public company and not less than one lakh rupees in case of a private company on the date of making of this declaration; and

(b) the company has filed with the Registrar a verification of its registered office as provided in sub-section (2) of section 12. 21

(2) If any default is made in complying with the requirements of this section, the company shall be liable to a penalty which may extend to five thousand rupees and every officer who is in default shall be punishable with fine which may extend to one thousand rupees for every day during which the default continues.

(3) Where no declaration has been filed with the Registrar under clause (a) of sub-section (1) within a period of one hundred and eighty days of the date of incorporation of the company and the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may, without prejudice to the provisions of sub-section (2), initiate action for the removal of the name of the company from the register of companies under Chapter XVIII.

Section 11 is Omitted vide Companies (Amendment) Act, 2015 (21 of 2015), notified on 26th May, 2015, with effect from 29th May 2015 vide notification S.O. 1440(E). To view the notification,Click Here
2(20) Company means a company incorporated under this Act or under any previous company law
2(34) Director means a director appointed to the Board of a company
Refer rule 24 and Form No. INC 21 of the Companies (Incorporation) Rules,2014.To view the rule,Click Here

2.1.24-Companies (Incorporation) Rules,2014

The declaration filed by a director shall be in  along with the fee as and the contents of the form shall be verified by a Company Secretary in practice or a Chartered Accountant or a Cost Accountant in practice:

Provided that in the case of a company requiring registration from sectoral regulators such as Reserve Bank of India, Securities and Exchange Board of India etc, the approval from such regulator shall be required.

 Omitted vide the Companies (Incorporation) Second Amendment Rules, 2015 notification no. G.S.R 442 (E) dated the 29th May, 2015. To view the notification,Click Here
To view the return,Click Here

Companies (Incorporation) Second Amendment Rules, 2015

Enforcement Notification S.O. 1440(E) dated 29/05/2016

Enforcement Notification S.O. 902(E) dated 26/03/2014

The Companies (Amendment) Act,2015

 

FORM NO. INC.21 Declaration prior to the commencement of business or exercising borrowing powers

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