Incorporating a company in India is just the first milestone. Before you can start any business operations, there is one critical filing that most first-time founders overlook, the INC 20A filing. This declaration for commencement of business is mandatory for every company incorporated after the commencement of the Companies (Amendment) Ordinance, 2018.
Without this commencement of business certificate, your newly registered company cannot enter into contracts, open operational bank accounts, or carry out any commercial activity. Think of it as the green signal from the Ministry of Corporate Affairs that your company is genuinely ready to operate. Skipping or delaying this filing can attract penalties, and in severe cases, the ROC may even initiate proceedings to strike off the company.
This guide covers everything you need to know about INC 20A filing, from eligibility and documentation to the step-by-step process and consequences of non-compliance.
What is Form INC-20A
Form INC-20A is a declaration that every company incorporated on or after 2nd November 2018 must file with the Registrar of Companies. It confirms that the subscribers to the Memorandum of Association have deposited the paid-up capital into the company's bank account as stated in the incorporation documents.
The legal basis for this requirement lies in Section 10A of the Companies Act, 2013, which was introduced through the Companies (Amendment) Ordinance, 2018. This section states that a company incorporated after the commencement of this ordinance shall not commence any business or exercise any borrowing powers unless a declaration is filed by a director within 180 days of incorporation.
In simple terms, INC 20A filing is proof that the company has received its initial capital from the subscribers. It bridges the gap between paper incorporation and actual business readiness. Once filed and approved, the MCA issues the commencement of business certificate, allowing the company to begin its operations legally.
Who Needs to File INC-20A
Not every company needs to file this form. The requirement applies specifically to companies incorporated on or after 2nd November 2018. If your company registration was completed before this date, you are exempt from this filing.
The following types of entities must complete INC 20A filing.
- Private limited companies incorporated after 2nd November 2018
- Public limited companies incorporated after 2nd November 2018
- One Person Companies (OPCs) incorporated after the said date
- Section 8 companies incorporated after 2nd November 2018
Companies that were already operational before this date, including those incorporated under the Companies Act, 1956 or the Companies Act, 2013 prior to the amendment, don't need to file INC-20A. The requirement is forward-looking and applies only to new incorporations post the ordinance.
Deadline for INC 20A Filing
The deadline for INC 20A filing is 180 days from the date of incorporation. This means that from the day you receive your Certificate of Incorporation, you have roughly six months to deposit the subscribed capital into the company's bank account and file the declaration.
Here is a practical timeline that most companies follow after incorporation.
| Timeline | Action Required |
| Day 1 | Receive Certificate of Incorporation from ROC |
| Week 1-2 | Open a bank account in the company's name |
| Week 2-4 | Subscribers deposit the paid-up capital into the company's bank account |
| Week 4-8 | Obtain a bank statement or certificate confirming the deposit |
| Within 180 days | File Form INC-20A on the MCA portal with verified bank proof |
Missing the 180-day window doesn't just delay your operations. It exposes the company and its directors to penalties and could trigger proceedings for removal of the company's name from the register.
Step-by-Step Process for INC 20A Filing
The actual filing process is straightforward, but it requires careful preparation. Here is a detailed walkthrough of each step.
Step 1: Open a Company Bank Account
After receiving the Certificate of Incorporation, the first task is to open a current account in the company's name. You will need the incorporation certificate, MOA, AOA, PAN card of the company, and identity proof of the directors. Most banks process this within 3 to 7 working days.
Step 2: Deposit Subscribed Capital
Each subscriber to the MOA must deposit their subscribed share capital into the company's bank account. For instance, if the MOA states that two subscribers have each subscribed to 50,000 shares of Rs. 10 each, the total paid-up capital of Rs. 10,00,000 must reflect in the bank account. The deposit must come from the subscribers' personal accounts for verification purposes.
Step 3: Obtain Bank Verification
Request a bank statement or a bank certificate that confirms the deposit of the subscribed capital. This document serves as primary evidence for the INC 20A filing. Some companies also obtain a letter from the bank on its letterhead, which adds an extra layer of verification.
Step 4: Prepare and File INC-20A on the MCA Portal
Log into the MCA portal and navigate to the e-filing section. Select Form INC-20A from the list. Fill in the required details, including the company's CIN, name, registered office address, and the details of the paid-up capital deposited. Attach the bank statement or bank certificate as supporting proof.
Step 5: Digital Signature and Certification
The form must be digitally signed by a director of the company using their DSC. It must also be certified by a practicing Chartered Accountant, Company Secretary, or Cost Accountant. The professional certification confirms that the information in the form is true and accurate.
Step 6: Submit and Track
After submission, the ROC reviews the form and the attached documents. If everything is in order, the commencement of business certificate is issued. You can track the status of your filing on the MCA portal under the company's dashboard. The approval typically takes 2 to 5 working days.
Documents Required for INC 20A Filing
- Certificate of Incorporation issued by the ROC
- PAN card of the company
- Bank statement or bank certificate showing the deposit of subscribed capital
- Registered office address proof
- Digital Signature Certificate (DSC) of the signing director
- Verification or certification from a practicing CA, CS, or CMA
The bank proof is the most critical document. It must clearly show the deposit of the exact amount of paid-up capital as declared in the MOA. Any discrepancy between the declared capital and the deposited amount will lead to rejection of the form.
Penalties for Non-Filing or Late Filing
The consequences of not completing INC 20A filing within the prescribed timeline are significant. Section 10A of the Companies Act lays out clear penalties for both the company and its officers in default.
If the form is not filed within 180 days, the company faces a penalty of Rs. 50,000. Each officer in default, typically the directors, is liable for a penalty of Rs. 1,000 per day of continuing default, up to a maximum of Rs. 1,00,000.
Beyond financial penalties, the ROC has the power to initiate action under Section 248 for striking off the company's name from the register. This means the company could lose its legal existence entirely. Directors of such companies may also face disqualification, which affects their ability to hold directorial positions in other entities. Maintaining proper annual compliance from the very beginning is the best way to avoid such outcomes.
Common Mistakes to Avoid
First-time founders frequently make avoidable errors during the INC 20A filing process. Here are the most common pitfalls.
Delaying bank account opening is the top mistake. Many promoters focus on building the product or acquiring clients and neglect the administrative formalities. Without a bank account, you can't deposit the subscribed capital, and without the deposit, you can't file INC-20A.
Another frequent error is depositing less than the declared paid-up capital. If your MOA mentions Rs. 1,00,000 as the total subscribed capital, the full amount must be deposited. Partial deposits will result in rejection of the form.
Some companies also confuse authorized capital with paid-up capital. Only the paid-up (subscribed) capital needs to be deposited and verified for the INC 20A filing. The authorized capital is the upper ceiling and does not need to be deposited.
Finally, not engaging a qualified professional for certification is a procedural misstep. The form requires mandatory certification from a practicing CA, CS, or CMA. Self-certification by directors is not accepted.
INC-20A vs Other Post-Incorporation Filings
| Filing | Details |
| INC-20A | Declaration for commencement of business. Filed within 180 days of incorporation. Confirms deposit of paid-up capital. |
| DIR-12 | Filed for appointment or change of directors. Required within 30 days of any directorial change. |
| ADT-1 | Filed for appointment of the first auditor. Required within 15 days of incorporation. |
| MGT-7 | Annual return filed once every financial year with the ROC. |
| AOC-4 | Financial statements filed annually with the ROC. |
| INC-22 | Filed when there is a change in the registered office address. |
Among all post-incorporation filings, INC 20A filing is unique because it directly determines whether the company can begin operations. Other forms like DIR-12 and ADT-1 are compliance-related, but they don't restrict the company's ability to transact. Getting the appointment of director and the INC-20A filing done promptly sets the foundation for a fully compliant company from day one.
Conclusion
INC 20A filing is one of the first compliance obligations for any newly incorporated company in India. It serves as the official confirmation that your company is capitalized and ready to conduct business. While the process itself is not complex, the consequences of ignoring or delaying it can be severe, ranging from financial penalties to potential strike-off of the company.
If your company was recently incorporated, prioritize this filing within the first few weeks. Open the bank account, deposit the subscribed capital, and engage a qualified professional to certify and submit the form on the MCA portal. Whether you need help with company registration or post-incorporation compliance like INC-20A, working with an experienced CA or CS ensures every filing is accurate, timely, and fully compliant.
