Commencement of business certificate

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sangita (Querist)
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19 December 2008 hello
Can u tell me the relevent section pl????
It means our client can operate bank account for capital as well as working cap expenditure provided there are no foreign investors.. am i correct????
pl reply ...

Regards
Sangita

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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20 December 2008 Restrictions on commencement of business is covered u/s 149 of The companies Act,1956.

Ajay Mishra

Ajay Mishra (Expert)
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25 December 2010 Hi

Yes, you can operate bank account for capital as well as for working capital.

Requirement to obtain Certificate to Commence Business by company issuing prospectus (Section 149)

In order to obtain Certificate of Commencement of Business, a public limited company shall file the following documents with concern ROC according to section 149:

1) A Prospectus/a statement in lieu of prospectus as the case may be to be supported with the following documents:-
a. List of the members of the company with their shareholding;
b. Confirmation for the paid-up share capital to the extent of Rs. 5lakhs;
c. List of director, manager, secretary and Auditors and changes among them, if any;
d. Consent of the auditors to includes their names in Prospectus/a statement in lieu of prospectus;
e. Copy of agreement for appointment of MD, underwriters, contracts entered into by promoters before incorporation, if any;
f. Certified copy of MOA and AOA;
g. Details of the preliminary expenses incurred by the company;
h. Power of Attorney to make correction in Prospectus/a statement in lieu of prospectus and to obtain COB from ROC;
i. Certified true copy of the resolution passed by the Board for approval of Prospectus/a statement in lieu of prospectus for filing with ROC;
2.) A duly verified declaration on non-judicial stamp paperthat the provision of section 149of the Act have been complied with, by one of the director or secretary or where the company has not appointed a secretary, a secretary in whole time practice in prescribed form Form-19/20, in case the company has filed Prospectus/a statement in lieu of prospectus..

However following forms will be filed with ROC:

1. Form 62 for submission of a Statement in lieu of Prospectus
2. Form 19 for declaration for prospectus, or
3. Form 20 for declaration in case of a statement in lieu of prospectus

Normally, when a public company is incorporated, it may take sometime before it decide to make a public cooer and issue of prospectus. However, a new company will comply with the required formalities and obtain the COB from ROC as soon as possible after formation because it can not commence any business activities or exercise its borrowing powers without it.

Regards
CS Ajay Mishra

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