Question

A company registered under the Companies Act, 2013, is required to file a declaration of commencement of business before starting operations. The directors ignore this obligation, and the firm commences business without filing the declaration. How much penalty can be imposed on the company by the Registrar for such non-compliance?

• A. ₹25,000
• B. ₹50,000
• C. ₹75,000
• D. ₹1,00,000

Hint:

Section 10A non-compliance is taken seriously because shell companies often avoid filing this declaration. Always remember: ₹50,000 on the company and ₹1,000 per day (max ₹1 lakh) for directors.

Answer 1

The Correct Option is B

Step 1: Understanding Section 10A of the Companies Act, 2013.
This provision mandates that every newly incorporated company must file a declaration of commencement of business within 180 days of incorporation. The company must confirm that it has received its subscription amount.
Step 2: Identifying the penalty for not filing.
If a company fails to file this mandatory declaration, the Registrar can impose a monetary penalty of ₹50,000 on the company. Directors may also be penalized separately.
Step 3: Applying to the given options.
Among the listed choices, only ₹50,000 matches the statutory penalty, making option (2) correct.