INC-20A Commencement of Business: What It Is, Due Date and Penalty for Non-Filing

INC-20A is the most commonly missed post-incorporation compliance in India. When a company is incorporated and the founders get busy setting up the business, this one-time declaration is frequently forgotten until a CA or CS flags it months later. The problem: under Section 10A of the Companies Act 2013, any company incorporated on or after 2 November 2018 cannot start business operations or borrow money until it has filed INC-20A. Doing either before filing is not just a technical violation; it exposes the directors to a penalty of Rs. 1,000 per day with no cap until the filing is made.

This guide explains what INC-20A is, who must file it, the exact due date, documents needed, and what happens if the company has already started operations without filing it.

What is INC-20A and who must file it

INC-20A is the form for the Declaration for Commencement of Business under Section 10A of the Companies Act 2013. It was introduced by the Companies (Amendment) Ordinance 2018, effective 2 November 2018. Before this ordinance, companies were automatically permitted to commence business after incorporation. Since November 2018, there is an extra step: the company must declare to the MCA that its subscribers have deposited the full subscription money into the company’s bank account.

The following companies must file INC-20A:

• Private Limited Companies incorporated on or after 2 November 2018
• Public Limited Companies incorporated on or after 2 November 2018
• One Person Companies (OPCs) incorporated on or after 2 November 2018
• Section 8 Companies incorporated on or after 2 November 2018

Companies without share capital (such as Section 25 companies under the old Act, guarantee companies without share capital) are exempt from INC-20A. Companies incorporated before 2 November 2018 are also exempt, as Section 10A does not apply retrospectively.

Due date calculation and exemptions

INC-20A must be filed within 180 days from the date of incorporation. The date of incorporation is the date printed on the Certificate of Incorporation (COI). Count 180 calendar days from that date (not working days).

Documents required

INC-20A has minimal documentation requirements:

• Bank account statement: A statement of the company’s current account showing that each subscriber/promoter has deposited the amount against their share subscription. The statement must show the credit entry for each subscriber’s amount. A bank-certified certificate stating the subscription amount received is also accepted.
• DSC of a director: The form must be digitally signed by a director of the company using a valid Digital Signature Certificate (Class 3).
• No CA/CS certification required: INC-20A does not require certification by a professional. The director makes the declaration under their own responsibility.

Step-by-step filing process on MCA V3

1. Open a bank account: Open the company’s current account with any scheduled commercial bank. Ensure all subscribers deposit their subscription money into this account before proceeding.
2. Obtain bank statement: Get a bank statement or banker’s certificate confirming that the subscription amounts have been received in the company’s account.
3. Log in to MCA V3: Go to mca.gov.in, log in with the director’s credentials, and navigate to E-Filing > Company Forms Download. Download the INC-20A form.
4. Fill the form: Enter the CIN, date of incorporation, and confirm the subscription amount received per subscriber. The form auto-populates company details from the MCA database.
5. Attach bank statement: Attach the bank account statement or certificate showing the subscription amounts credited. PDF format, file size under 2MB.
6. DSC and submit: Attach the director’s DSC, verify all details, and upload the form on MCA V3. Pay the filing fee (based on share capital, typically Rs. 200 to Rs. 300 for most startups).
7. Approval: INC-20A is processed by the MCA system. Once accepted, the company is officially permitted to commence business and exercise borrowing powers.

Penalties and ROC strike-off risk

The ROC has authority under Section 248(1)(c) to strike off a company if INC-20A has not been filed within 180 days of incorporation. This is distinct from the general strike-off for non-filing of annual returns. The ROC can initiate this action even if no business has been conducted and no annual returns are yet due.

What to do if you have already missed the deadline

If the 180-day window has passed and INC-20A has not been filed:

1. File INC-20A immediately. Late filing is accepted with automatic late fees. There is no separate late fee form; the MCA system calculates and collects late fees at the time of filing.
2. Calculate the penalty: Rs. 50,000 for the company + Rs. 1,000 per day per officer from day 181 of incorporation to the date of filing. The officer penalty is capped at Rs. 1,00,000 per officer.
3. Ensure the bank account was opened and subscription amounts were credited before filing. Even if this was done late, the bank statement showing the credit is sufficient.
4. If the company has already been struck off by the ROC under Section 248(1)(c), restoration via NCLT (National Company Law Tribunal) under Section 252 will be required before INC-20A can be filed.

Frequently Asked Questions