INC-20A: Commencement of Business Filing for New Companies

Key takeaways

• Form INC-20A is a director's declaration under Section 10A of the Companies Act, 2013, confirming a company can legally start business.
• It applies to companies with share capital incorporated on or after 2 November 2018. Companies without share capital, companies incorporated earlier, and LLPs fall outside its scope.
• The declaration must be filed within 180 days of incorporation. It confirms that subscribers to the Memorandum of Association have paid for their shares and that the registered office has been verified with the Registrar of Companies (ROC).
• Filing after 180 days attracts an additional fee calculated as a multiple of the normal fee, rising from one time to twelve times depending on the delay.
• Failing to file at all triggers a penalty under Section 10A(2): ₹50,000 for the company and ₹1,000 per day of default for each officer in default, capped at ₹1,00,000.
• An unfiled INC-20A also blocks the company from commencing business or borrowing, and can lead to the Registrar initiating removal of the company's name from the register.
• INC-20A is processed in Straight Through Processing (STP) mode on the MCA V3 portal, meaning it is auto-approved on submission without manual ROC review.

What is Form INC-20A

Form INC-20A is the declaration a director files with the Registrar of Companies to confirm that a newly incorporated company has met the legal conditions to start business. Its formal name on the MCA portal is "Declaration for commencement of business." Filing it is what actually switches a company from being merely incorporated (a legal entity on paper) to being permitted to trade, enter contracts tied to business activity, and borrow money.

The legal basis: Section 10A and Rule 23A

Section 10A of the Companies Act, 2013 is the statute. It creates the obligation itself and sets out the penalty for non-compliance. It was inserted with effect from 2 November 2018, initially through an ordinance, and confirmed by the Companies (Amendment) Act, 2019.

Rule 23A of the Companies (Incorporation) Rules, 2014 prescribes that the declaration under Section 10A must be made in Form INC-20A, verified by a practising Company Secretary, Chartered Accountant, or Cost Accountant. Where the company's objects require approval from a sectoral regulator such as the Reserve Bank of India (RBI) or the Securities and Exchange Board of India (SEBI), that approval must also be attached.

Which companies must file INC-20A, and which are exempt

INC-20A applies to a company that has authorised share capital and was incorporated on or after 2 November 2018. Three categories fall outside this:

• Companies incorporated before 2 November 2018, regardless of share capital.
• Companies without share capital, regardless of when they were incorporated. This includes most companies limited by guarantee.
• LLPs. Section 10A sits inside the Companies Act, 2013 and applies to companies; LLPs are incorporated and governed under the separate LLP Act, 2008, which has no equivalent commencement-of-business requirement.

The determining factor is having share capital at all, not the size of that capital. A company with a nominal authorised capital of ₹1 lakh is just as much in scope as one with ₹10 crore.

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Documents required for INC-20A

• A photograph of the registered office, showing the exterior of the building and the interior with at least one director or key managerial personnel visible. This is the only mandatory attachment on the current webform.
• Each subscriber's name and the amount received from them, entered directly as webform fields rather than as an uploaded bank statement.
• Certification by a practising Company Secretary, Chartered Accountant, or Cost Accountant, completed by entering their membership or certificate of practice number and digitally signing the webform, not by attaching a separate certificate.
• If the company's activities are regulated by a sectoral regulator such as RBI, SEBI, or IRDAI, the regulator's name is declared as a webform field. Rule 23A separately requires the regulator's approval to be attached with the declaration; on the current webform this would go under the optional attachments.
• Up to five optional attachments, for any other supporting information the company wants on record.

INC-20A filing fee

INC-20A due date

The declaration must be filed within 180 days of the date of incorporation, which is the date on the Certificate of Incorporation.

Late fee and penalty for missing the INC-20A deadline

The late fee applies once you do file, even after the deadline has passed. Rule 12 of the Companies (Registration Offices and Fees) Rules, 2014 sets an additional fee as a multiple of the normal fee, based on how late the filing is. The delay periods below run from the 180-day deadline itself, not from the date of incorporation:

The penalty under Section 10A(2) is separate, and arises specifically because the declaration wasn't filed within the 180-day window at all, regardless of whether it's filed late afterward. It is ₹50,000 for the company, and ₹1,000 per day of continuing default for each officer in default, capped at ₹1,00,000 per officer. A company that crosses the 180-day mark without filing typically faces both: the late fee to get the form through the MCA system, and separate exposure to this penalty through adjudication.

Section 446B of the Act allows a reduced penalty, not more than half the amount specified and capped at ₹2 lakh for the company and ₹1 lakh for an officer, for One Person Companies, small companies, start-up companies, and Producer Companies, for non-compliance with any provision of the Act. Whether this reduction has actually been applied to Section 10A defaults isn't settled based on publicly available adjudication orders, so eligible companies facing this situation should confirm the position with a practising company secretary rather than assume the reduction applies automatically.

What happens if INC-20A is never filed

If no declaration is filed within 180 days, and the Registrar has reasonable cause to believe that the company isn't carrying on any business or operations, the Registrar can initiate proceedings to remove the company's name from the register of companies, separately from and in addition to the monetary penalty. Beyond that risk, an unfiled INC-20A blocks the company operationally: it cannot legally commence business or exercise borrowing powers, and the MCA system will not process several other filings until INC-20A is on record.

How to file INC-20A on the MCA V3 portal

1. Log into the MCA V3 portal and find Form INC-20A (under MCA Services → E-filing → Company Forms Download). Once you enter the company's CIN, the portal auto-fills the company name, registered office address, and location; you don't type that in.
2. Answer one yes/no question: is the company regulated by a sectoral regulator like RBI, SEBI, or IRDAI? If yes, you name the regulator. If not, you skip it.
3. Type in who paid what: for each person who subscribed to shares at incorporation, you enter their name and how much they paid, directly into the form. No bank statement upload for this part; it's just data entry. You also enter the board resolution number and date that authorized the director to file this.
4. Attach one photo: a picture of the registered office, outside of the building, and inside, with a director or key managerial person visible in the photo. This is the only attachment the form actually requires. You can add up to five extra attachments if you want, but nothing else is mandatory.
5. Submit, then sign: submitting generates a tracking number (SRN). After that, the director signs digitally (DSC), and separately, a practising CS, CA, or Cost Accountant has to certify and digitally sign it too, entering their membership number.
6. Upload and pay, on the clock: you have 15 days after getting that SRN to upload the signed document. Then you have 7 days after that upload, or your original filing deadline plus 2 days, whichever comes first, to pay the fee. Miss either deadline and the SRN dies. You'd have to start the whole filing over.

According to the official MCA Instruction Kit for INC-20A, the form is processed in Straight Through Processing (STP) mode, meaning it is taken on record electronically without manual review once submitted correctly. Approval typically shows up on the company's dashboard within a few working days.

FAQs on INC-20A

What is the difference between INC-20A and INC-22?

INC-20A is the director's declaration under Section 10A confirming that subscribers have paid for their shares and that the registered office has already been verified. INC-22 is the separate form used to notify or verify a company's registered office address. In most cases, the registered office is confirmed at incorporation through SPICe+, so INC-22 is only filed separately if the office wasn't declared at incorporation or the address changes later. INC-20A cannot be filed until this registered office verification is already on record.

Is INC-20A required for a Section 8 company?

It depends on whether the company has share capital. Section 10A applies only to companies with share capital, and most Section 8 companies, formed for charitable or non-profit objects, are structured as companies limited by guarantee without share capital, which puts them outside its scope. If a Section 8 company was incorporated on or after 2 November 2018 and does have share capital, the general applicability rule still applies, since the statute doesn't carve out a separate exemption for Section 8 companies.

Who can certify Form INC-20A?

The form must be verified by a practising Company Secretary, Chartered Accountant, or Cost Accountant under Rule 23A. This is a mandatory field on the form itself; without a valid practising professional's certification, the declaration cannot be filed.

Is INC-20A required for an LLP?

No. Section 10A applies to companies incorporated under the Companies Act, 2013. LLPs are incorporated and governed under the LLP Act, 2008, which has no equivalent commencement-of-business declaration, so an LLP can begin operations immediately after receiving its certificate of incorporation.