Form INC-20A: Commencement of Business Declaration

Short answer: Form INC-20A is a mandatory declaration that every new company with share capital must file with the Registrar of Companies (RoC). It confirms that the initial subscribers have paid their share subscription money into the company's bank account. This form must be filed within 180 days of incorporation, before the company can legally commence its business operations or exercise any borrowing powers. Failure to file invites significant penalties and potential strike-off action.

What is Form INC-20A and why is it mandatory?

Form INC-20A is a declaration required under Section 10A of the Companies Act, 2013. Its primary purpose is to ensure that the promoters of a new company are serious about the venture and have infused the initial capital as promised in the Memorandum of Association (MOA). By verifying the receipt of this subscription money, the government prevents the creation of inactive or 'shell' companies. Filing this form is a critical first step in post-incorporation compliance, acting as a green signal for the company to start its business activities.

Who needs to file Form INC-20A?

Every company having a share capital incorporated in India must file Form INC-20A. This includes private limited companies, one-person companies (OPCs), and public limited companies. The requirement applies to all such companies incorporated after the rule came into effect (2nd November 2018).

However, certain entities are exempt from this filing requirement:

• Companies incorporated before 2nd November 2018.
• Companies limited by guarantee and not having a share capital (e.g., certain Section 8 companies).

What is the due date for filing Form INC-20A?

The due date for filing Form INC-20A is strictly within 180 days from the date of the company's incorporation. The date of incorporation is mentioned on the Certificate of Incorporation issued by the Ministry of Corporate Affairs (MCA). This is a non-negotiable deadline, and missing it results in penalties and other adverse consequences. It is advisable to file the form as soon as the subscribers deposit their capital into the company's bank account.

What are the consequences of not filing Form INC-20A?

Non-compliance with Section 10A carries severe penalties, underscoring its importance. The consequences include:

1. Monetary Penalty: A penalty of ₹50,000 is levied on the company. Additionally, every officer in default (which includes directors) is liable for a penalty of ₹1,000 for each day the default continues, capped at a maximum of ₹1,00,000.
2. Restriction on Business: The company cannot commence any business activities or exercise any borrowing powers until the declaration is filed.
3. Company Strike-Off: If the form is not filed within the 180-day period, the Registrar of Companies has reasonable grounds to believe the company is not carrying on any business. The Registrar can then initiate action to remove the company's name from the official register, a process known as company strike-off.

What documents are required for filing Form INC-20A?

Filing Form INC-20A is straightforward, requiring minimal but specific documentation. The primary document is proof that subscribers have paid the subscription money.

• Bank Account Statement: A copy of the company’s bank statement showing the credit entries for the share subscription money received from each subscriber. The statement should clearly indicate the names of the subscribers and the amounts they have paid.
• Regulatory Approvals (if applicable): If the company's business requires any registration or approval from sectoral regulators like the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), or IRDAI, proof of such registration or approval must also be attached.

INC-20A Filing Checklist

Use this checklist to ensure you have everything in order before filing.

Step	Action	Notes
1. Open Bank Account	Open a current account in the name of the newly incorporated company.	This is the first practical step post-incorporation.
2. Receive Subscription Money	Ensure all subscribers named in the MOA transfer their respective share amounts.	The transfer must be from the subscribers' own accounts.
3. Obtain Bank Statement	Get a bank statement showing these transactions clearly.	Digital or physical copies are acceptable.
4. Engage a Professional	Appoint a Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant (CMA).	The form requires certification by a practicing professional.
5. Prepare and File Form	The professional will prepare and file e-Form INC-20A on the MCA V3 portal.	Director's DSC is required for signing.
6. Verify Filing	Once filed, check the MCA portal for the approval status (SRN status).	You will receive a confirmation email upon approval.

Worked example

Let's consider 'Bengaluru AI Solutions Pvt. Ltd.', a startup incorporated in Bengaluru on April 15, 2026. The two founders, Anjali and Ben, subscribed to 50,000 shares of ₹10 each, making the total subscribed capital ₹5,00,000.

1. Incorporation Date: April 15, 2026.
2. Due Date for INC-20A: 180 days from April 15, 2026, which is October 12, 2026.
3. Action Taken:
   • The company opens a current account with a bank by April 30, 2026.
   • Anjali transfers her share of ₹2,50,000 on May 5, 2026.
   • Ben transfers his share of ₹2,50,000 on May 10, 2026.
   • The company's director obtains the bank statement showing these two credit entries.
4. Filing: The company's CA prepares Form INC-20A, attaches the bank statement, gets it digitally signed by one of the directors, certifies it with their own digital signature, and files it on the MCA portal on May 20, 2026.

Outcome: Bengaluru AI Solutions Pvt. Ltd. is now compliant with Section 10A. It can legally start its business, issue invoices to clients, hire employees, and take on loans. This is well before the October 12 deadline, avoiding any penalties.

Common mistakes

1. Starting Business Prematurely: Entering into contracts, issuing invoices, or making payments for business purposes (other than preliminary expenses) before filing INC-20A is a violation of the Act.
2. Missing the 180-Day Deadline: Many founders, caught up in product development and business strategy, forget this crucial compliance step, leading to unnecessary penalties and legal complications.
3. Incorrect Proof of Payment: Attaching a bank statement that does not clearly show the subscriber's name or the amount paid. The transaction narration should be clear.
4. Assuming it's Not Required: Some founders of small startups mistakenly believe this compliance is only for large companies. It applies to all companies with share capital, regardless of size.
5. Forgetting about Professional Certification: The form cannot be filed without being certified by a practicing CA, CS, or CMA. This is not a self-declaration that a director can file alone.

How SP & SC helps

SP & SC Legal ensures your new company meets all its initial compliance obligations seamlessly. We handle the preparation and filing of Form INC-20A, verify your documents, and provide certification from our in-house professionals. This prevents penalties and ensures your company has a clean compliance record from the start. For comprehensive support with all your annual filings, post-incorporation steps, and ongoing compliance, we offer end-to-end solutions that let you focus on growing your business.

Frequently asked questions

Can I borrow money for the company before filing INC-20A?

No. Section 10A(1)(b) of the Companies Act, 2013, explicitly prohibits a company from exercising any borrowing powers until it has filed the declaration of commencement of business in Form INC-20A.

What is the government fee for filing Form INC-20A?

Government fees for filing are based on the nominal share capital of the company, as prescribed under the Companies (Registration Offices and Fees) Rules, 2014. For example, for a company with an authorised capital of up to ₹1,00,000, the fee is typically ₹200. The fee increases with higher capital slabs. Late filing attracts significant additional fees.

Is INC-20A required for a One Person Company (OPC)?

Yes. A One Person Company is a type of private limited company that has a share capital. Therefore, an OPC must also comply with Section 10A and file Form INC-20A within 180 days of its incorporation.

What happens if the subscribers don't pay the share capital?

The company will be unable to file Form INC-20A, as the primary proof (bank statement) will be missing. Consequently, it cannot legally start its business. If the 180-day period lapses, the company and its directors will face penalties, and the Registrar can initiate the process to strike off the company's name.

Can I file INC-20A after the 180-day deadline?

Yes, the MCA portal allows for late filing of Form INC-20A upon payment of additional fees (late fees). However, filing late does not protect the company and its officers from the penalty prescribed under Section 10A(2) for the period of non-compliance. It is always best to file within the stipulated time.

Get a fixed-fee quote

Starting your company on the right compliance footing is crucial. Share your Certificate of Incorporation and Memorandum of Association with us, and we will provide a written fixed-fee quote for filing your Form INC-20A and managing your other initial compliance needs. We handle the entire process end-to-end, ensuring your new venture is fully compliant from day one. Contact us at Contact SP & SC or WhatsApp us at +91 90356 74566.