Formation of a Company — Secretarial Practice STD 11 Commerce / Arts — Question

Commencement of Business: Public companies and private companies not having share capital can commence their business after getting an Incorporation Certificate. But, companies having share capital and which are incorporated after 2nd November 2018 have to obtain a Certificate of Commencement of Business.

Steps in Certificate of Commencement of Business:
(i) Filing of a declaration by Directors:
Every Director has to file a declaration along with the prescribed fees declaring that he has paid the value of shares agreed to be taken by him. Such declaration should be verified by Company Secretary or Chartered Accountant or Cost Accountant. Such declaration should be submitted within 180 days from the date of incorporation.

(ii) File verification of Registered Office:
The company has to also file verification of its registered office with the ROC.

(iii) Obtain license or approval from Sectoral Regulator:
Companies that propose to conduct banking business, insurance business, or proposed to be listed on Stock exchanges need to register with Sectoral Regulators like RBI, Securities and Exchange Board of India, etc. Such companies must submit approval received from Sectoral Regulator to ROC.

(iv) Commencement of business:
After filing the required documents, RQC issues the Certificate of Commencement of Business. Public and Private companies having share capital can now start their business or start the collection of capital. A public company can now issue a prospectus to invite the public for subscribing to its share capital.