Where A Company Not Issues Prospectus For Public Subscription
For obtaining a certificate to commence business, the following actions are required to be taken:—
(i) the company shall file with the Registrar a statement in lieu of prospectus (SLP) (signed by every director) electronically at the MCA portal in the form given in Schedule III to Act together with the E-Form 62 and shall pay the prescribed fee by online or offline as per Schedule X of the Companies Act, 1956.
(ii) the directors should pay the value of the shares to the extent money is payable in cash with application/allotment;
(iii) a duly certified declaration shall be filed electronically at the MCA portal in the E-Form 20 and a stamped copy shall be simultaneously filed with the Registrar signed by a director/secretary or by secretary in practice where there is no secretary, to the effect that the requirements of section 149(2) have been complied with.
(iv) the company shall not allot any share or debenture at least for three days after filing of statement in lieu of prospectus with the Registrar. [Section 70(1)];
(v) the company shall pay the prescribed filing fee by online or offline under Schedule X on SLP and on e-Form 20 to the Registrar of Companies.
The Registrar of Companies shall then issue the requisite certificate of commencement of business.
Note: It was decided in the case of Malabar Iron & Steel Works Ltd. V Registrar of Companies (1963) that COB cannot be issued if the company has not complied with the provisions of section 149(1), even though it has issued a SLP u/s 70.
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