Sections 1, 2, 10A and 12 of the Companies Amendment Act 2019
The Companies (Amendment) Act, 2019 amended the Companies Act, 2013 in several areas. This page explains Section 1 and Section 2 of the 2019 Amendment Act, the insertion of Section 10A concerning commencement of business, and the amendment to Section 12 concerning physical verification of a company's registered office.
Section 1 - Short title and commencement
Section 1 names the legislation as the Companies (Amendment) Act, 2019 and specifies how its provisions came into force. Most provisions, including the amendments discussed on this page, were deemed to have come into force on 2 November 2018. The provisions specifically excluded by Section 1(2) were to commence on dates appointed by the Central Government through notification in the Official Gazette.
Meaning: A commencement clause identifies the legal name of an enactment and the date from which its provisions operate. Where an enactment states that a provision is deemed to have come into force on an earlier date, the provision is treated as operative from that specified date, subject to the terms of the enactment.
Section 2 - Amendment of Section 2(41) of the Companies Act 2013
Section 2 of the Companies (Amendment) Act, 2019 amended clause (41) of Section 2 of the Companies Act, 2013. Section 2(41) defines the expression financial year.
The amendment shifted the authority for allowing a different financial year, in the specified circumstances involving a holding company, subsidiary or associate company of a company incorporated outside India, from the Tribunal framework to the Central Government. It also protected applications that were already pending before the Tribunal on commencement of the 2019 Amendment Act by requiring those applications to be dealt with under the earlier applicable provisions.
Scope of the proviso: Where a company or body corporate is a holding company, subsidiary or associate company of a company incorporated outside India and must follow a different financial year for consolidation of accounts outside India, the Central Government may, on an application made in the prescribed form and manner, allow a different period as its financial year.
Section 10A - Commencement of business
Section 3 of the Companies (Amendment) Act, 2019 inserted Section 10A into the Companies Act, 2013. The provision applies to a company incorporated after the commencement of the amendment and having share capital.
Under Section 10A(1), the company cannot commence business or exercise borrowing powers unless a director files the prescribed declaration with the Registrar within 180 days from incorporation, confirming that every subscriber to the memorandum has paid the value of the shares agreed to be taken, and the company has filed verification of its registered office as required by Section 12(2).
Form INC-20A
The declaration under Section 10A(1)(a) is filed in Form INC-20A under Rule 23A of the Companies (Incorporation) Rules, 2014. The MCA instruction kit states that the declaration is to be filed by a director within 180 days of incorporation for a company having share capital.
Penalty for default
Section 10A(2) provides a penalty of Rs. 50,000 on the company. Every officer in default is liable to a penalty of Rs. 1,000 for each day during which the default continues, subject to a maximum of Rs. 1,00,000.
Possible removal of company name
Under Section 10A(3), where the required declaration is not filed within 180 days and the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, action may be initiated for removal of the company's name from the register of companies under Chapter XVIII of the Companies Act, 2013.
Section 12(9) - Physical verification of registered office
Section 4 of the Companies (Amendment) Act, 2019 inserted sub-section (9) into Section 12 of the Companies Act, 2013. Section 12 generally deals with the registered office of a company.
Section 12(9) authorises the Registrar, where there is reasonable cause to believe that a company is not carrying on any business or operations, to cause a physical verification of the registered office in the prescribed manner. If default in complying with Section 12(1) is found, the Registrar may, without prejudice to the penalty provision in Section 12(8), initiate action for removal of the company's name from the register under Chapter XVIII.
Practical compliance summary
For companies having share capital, commencement-of-business compliance should be checked immediately after incorporation. Subscriber share money, registered-office verification and timely filing of INC-20A are linked requirements under Section 10A. Companies should also ensure that the registered office satisfies Section 12 and remains capable of receiving and acknowledging communications and notices.
For the current statutory text, prescribed forms, filing requirements and later notifications, users should verify the latest material published by the Ministry of Corporate Affairs before filing or taking compliance action.
Last reviewed: 18 September 2026. This article is intended for legal information and should be read with the Companies Act, 2013, applicable rules and current MCA notifications.