Published on Apr 2, 2025Updated on Sept 10, 2026
Operating a business in India requires compliance with various legal formalities, including obtaining a Commencement of Business Certificate (COB). This certificate is mandatory for companies with share capital and must be filed before starting operations or borrowing funds.
This article explains the importance of a Commencement of Business Certificate, who needs it, and how to apply.
COB is a document filed by the directors of a company that serves as a declaration that the company is authorised to begin operations. It also confirms that the company has received the subscription money from its shareholders. New businesses must understand this document clearly for proper setup and to ensure legal compliance.
Additionally, it is an important requirement when applying for a business loan, as it demonstrates that the company is legally permitted to operate.
The Commencement of Business Certificate must be obtained by filing Form INC-20A with the Registrar of Companies. Businesses must submit this form within 180 days of incorporation to confirm that the company’s subscribed share capital has been deposited into its account. However, certain companies are exempt from filing Form INC-20A:
The eligibility criteria depend on the company's incorporation date and share capital structure.
The companies that need to file a COB certificate include:
To file Form INC-20A, companies must submit the following paperwork:
Businesses can complete this process through the Ministry of Corporate Affairs (MCA) portal. Here are the general steps to file form INC 20A online:
*Please refer to the official MCA portal for the most up-to-date information on the application process.
The fees are charged based on the nominal share capital of the company:
|
Nominal Share Capital |
Fees (INR) |
|
Less than 1,00,000 |
200 |
|
1,00,000 to 4,99,999 |
300 |
|
5,00,000 to 24,99,999 |
400 |
|
25,00,000 to 99,99,999 |
500 |
|
1,00,00,000 or more |
600 |
Failure to file Form INC-20A within 180 days of incorporation can lead to several legal and financial consequences for a company. These are some of the penalties for non-compliance with COB rules:
Obtaining a Commencement of Business Certificate (COB) is a crucial step for companies with share capital in India. This certificate ensures compliance with the Companies Act of 2013, allowing businesses to commence operations smoothly and access necessary capital. Understanding how COB affects business operations is vital; it not only facilitates legal compliance but also enhances credibility with stakeholders. Additionally, possessing a COB is essential when seeking business funding, as it assures lenders of the company's legitimacy and adherence to statutory requirements.
If you're exploring financing options to expand your operations, SMFG India Credit offers business loans of up to INR 1 crore* without any collateral. To qualify, your business should have been operating for at least 3 years, with consistent income and profitability for the past 2 years. Apply online today or contact us for more details.
Important Note: This article is for general informational purposes only and may be subject to change from time to time. As product features, eligibility criteria, interest rates, charges, fees, tenures and other terms may be revised as per SMFG India Credit's policies, readers are advised to refer to the latest details from the respective product pages (please select from the top menu). For the latest loan charges, please visit Charges & Fees Link and for the latest Interest rates, please visit Interest Rate Rationale. Please note that final loan terms, disbursement process and eligibility criteria will depend on SMFG India Credit's policies at the time of loan application.
The content of this article is for information purposes only and does not constitute as, an offer or advise to avail any products or services from, or, a commitment to grant any loan by the company. It is not intended to create any rights or obligations against us. All content is provided "as is" without any warranty of any kind, either express or implied & we disclaim any warranty or representation, whatsoever, in regards to the content. Please refer to the Privacy Policy of the company to understand the use, processing and storage of your personal data.
A Commencement of Business Certificate is mandatory for companies with share capital to start operations. It must be obtained by filing Form INC-20A with the Registrar of Companies (ROC).
A business proof certificate is an official document verifying a company's legal existence and operations, such as a Certificate of Incorporation, GST registration, or trade licence.
You can apply through the Registrar of Companies or any other relevant authority by submitting registration documents, address proof, and tax details.
Was this helpful?
Insurance disclaimer SMICC is registered with the Insurance Regulatory and Development Authority of India (IRDAI) as a Corporate Agent. IRDAI Registration No.: [CA0098] CIN No. U65191TN1994PLC079235. The insurance policy is a contract between the customer and the insurance company, and policy is underwritten by insurance companies. SMICC acts only as the distributor and is not responsible for any risk, policy issuance, claim settlement/repudiation etc. Insurance is the subject matter of solicitation. Purchase of insurance is voluntary and subject to insurer underwriting and policy terms and conditions. Customers are advised to read the policy terms and conditions, benefits, exclusions, claim settlement carefully before purchase. Kindly note that “Insurance Products” are not mandatory for the purpose of the application and disbursement of loan. It shall be the sole discretion of the customer, by providing explicit consent, to avail such insurance along with the Loan.
Beware of Spurious calls/ Fraud phone calls IRDAI is not involved in activities like selling Insurance policies, announcing bonus or investment of premium. Public receiving such phone calls are requested to lodge a police complaint.
