Commencement of Business Certificate

Creating Enterprenuers & Simplifying Compliances

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Creating Enterprenuers & Simplifying Compliances

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Commencement of Business Certificate

The Ministry of Corporate Affairs has re-introduced the concept of commencement of business certificate. Under the newly introduced The Companies (Amendment) Ordinance 2018, all companies registered in India after the commencement of the Companies (Amendment) Ordinance, 2018 and having a share capital is required to obtain commencement of business certificate before commencing any business or exercising any borrowing powers. Since The Companies (Amendment) Ordinance 2018 was introduced in November 2nd 2018, any company incorporated after November 2018 would be required to obtain Commencement of Business Certificate.

Time Limit for Obtaining Commencement of Business Certificate

The commencement of business certificate must be obtained within 180 days of incorporation of the company. While filing the application for commencement, each of the Directors of the company must declare that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him/her on the date of the making of such declaration.

Penalty for Not Obtaining Commencement of Business Certificate

The penalty for non-compliance is very high as under:

Penalty Levied on Company

Any company that does not obtain commencement of business certificate within 180 days of incorporation will be liable for payment of a penalty of Rs.50,000.

Penalty Levied on Directors

Each of the Directors who have defaulted would be liable for payment of a penalty of Rs.1000 per day of default upto a maximum of Rs.1 lakh.

Company Strike-Off

Also, after 180 days of incorporation, if the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he/she may initiate action for the removal of the name of the company from the register of companies (i.e. Company Strike-off).

Society Registration

Procedure for Society Registration in India

A Society is a not-for-profit entity engaged in the promotion of charitable activities like education, art, religion, culture, music and sports, etc. A society is thus an association of persons determined to act jointly for some common purpose. In India, Societies Registration Act, 1860 lays down the procedure for registration of societies and the same has been adopted by State Governments with/without amendments. In this article, we look at the need and procedure for registering a Society.


A Society is an entity formed for the promotion of literature, science or the fine arts or the diffusion of useful knowledge/political education or for charitable purposes. As per the Societies Registration Act, 1860, a Society can be registered for the following purposes:

  • Grant of charitable assistance
  • Creation of military orphan funds
Promotion of:
  • Science, Literature, Fine Arts
  • Instruction or diffusion of useful knowledge, Diffusion of political education
  • Foundation and maintenance of libraries or reading rooms
  • Foundation and maintenance of public museum and galleries

In addition to the above purposes, based on the Societies Registration Act that is amended and implemented by the respective State Government, the purposes for which a Society can be registered in India may vary. A society can either be registered or unregistered. The registration of a Society gives the Society a legal status and is required for recognition of the society by legal authorities, obtaining income tax registrations, bank account opening and vesting of property.

Requirements for Society Registration

A Society can be registered for any of the above mentioned purposes that are not-for-profit by a minimum of seven or more persons. Besides individuals, a company or partnership firm or registered society or a foreigner may also be eligible to form a society by subscribing to the Memorandum of a Society.

The Memorandum of a Society or Memorandum of Association of a Society is a document which lays down the objects and permitted activities of the Society. The Memorandum of Association of a Society must contain the name of the society, objects of the society, details of the members of the governing body and registered office address.


  • Affidavit No. 1 regarding ownership and NOC for registered office of society
  • Affidavit No. 2 regarding persons not related to each other and name of society
  • ID Proofs of all the members
  • Address Proof of all the members
  • Electricity/ Water bill (Business Place)
  • Copy of Property papers (If owned property)
  • Landlord NOC (Format will be provided)