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File INC-20A
A company incorporated with share capital cannot start business or borrow money until this declaration is filed. It is due within 180 days of incorporation, and it is filed once.
- Prepared, certified and filed in one working day
- Due within 180 days of incorporation, and it is a one time filing
- CA or CS certification included
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What form INC-20A is
A declaration that the subscribers have paid for their shares, and the point at which a company is allowed to trade.
Form INC-20A is the declaration of commencement of business. Every company incorporated on or after 2 November 2018 that has share capital files it with the Ministry of Corporate Affairs, and the directors do so within 180 days of the date of incorporation.
What the declaration says is that every subscriber to the memorandum has paid the value of the shares they agreed to take. That means the company has to open a current account and the promoters have to actually put the subscription money into it, because the bank statement showing those credits is the attachment the form is built around.
Until it is filed, section 10A says the company shall not commence any business and shall not exercise any borrowing powers. So this is not a formality that follows trading; it is the thing that makes trading permissible.
- Who files
- Companies with share capital
- Incorporated on or after 2 November 2018
- Who does not
- Companies limited by guarantee
- And anything incorporated before that date
- Due date
- 180 days from incorporation
- Not from the AGM
- Frequency
- Once
- A one time filing, never repeated
- Penalty if not filed
- ₹50,000 on the company
- And ₹1,000 a day on each officer in default, up to ₹1,00,000
- Turnaround
- 1 working day
- Subject to government processing time
Why founders file through LegalWiz.in
- Prepared and certified by a practising chartered accountant or company secretary
- A dedicated relationship manager on the filing
- The bank evidence checked against what the form actually needs
- The approval shared with you by email once it is through
What the service covers
One form, and the check that its evidence will pass.
- Collection of the basic information about the company
- A check of the bank evidence against the subscription amounts in the memorandum
- Preparation of form INC-20A with its attachments
- Certification by a practising chartered accountant or company secretary
- Online filing with the Registrar
- The approval shared with you by email
The government filing fee is separate and depends on the company’s authorised share capital.
What happens if it is not filed
This is the rare filing where the consequences arrive before the deadline does, because the restriction applies from day one.
The company cannot legally trade
Section 10A prevents a company from commencing business until the declaration is filed. Work done and invoices raised before that point were not permitted, whatever else was in order.
It cannot borrow
Borrowing powers cannot be exercised either. A loan or a facility arranged in the first months is being taken by a company that has not yet declared itself able to.
The penalty falls on the officers too
The company is liable to ₹50,000. Every officer in default is liable to ₹1,000 for each day the default continues, up to a maximum of ₹1,00,000, which is personal rather than corporate.
The Registrar may strike the company off
Where the declaration has not been filed within 180 days, the Registrar may take the view that the company is not carrying on business and begin action to remove its name from the register.
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What we need to file your declaration
Two attachments, and the first one is the whole point of the form.
Proof that the subscription money was paid
A bank account statement of the company showing the credit entries for the subscription money received from every subscriber to the memorandum. NEFT or IMPS receipts can be attached instead.
Registration certificate from a regulator
Where the company is regulated, the certificate of registration issued by the Reserve Bank of India or the relevant regulator. This applies to NBFCs among others.
File your declaration in three steps
Step 01
Answer a few quick questions
- Spend less than 10 minutes on a short online questionnaire
- Upload the bank evidence and the incorporation details
- Pay through a secure payment gateway
Step 02
Our experts take over
- You are assigned a dedicated relationship manager
- The form is prepared and the attachments checked
- It is certified by a practising professional and filed online
Step 03
Your form is filed
- The whole process takes 1 working day
- The approval is shared with you by email
Subject to government processing time.
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Is filing INC-20A mandatory?
Yes, for every company incorporated on or after 2 November 2018 that has share capital.
It establishes that the company has received the paid up share capital and is therefore able to start its business and to borrow in its own name.
Which companies do not have to file it?
Companies limited by guarantee, which have no share capital, and any company incorporated before 2 November 2018.
What is the due date?
Within 180 days of the date of incorporation. The clock starts at incorporation, not at the first transaction.
Is it a one time filing?
Yes. It is filed once, shortly after incorporation, and never again. It is not an annual compliance.
What is the government fee?
It depends on the company’s authorised share capital, on a rising slab. At the bottom of the slab, for authorised capital below one lakh, it is a few hundred rupees.
Filing late attracts an additional fee that multiplies with the length of the delay, and that is separate from the penalty under section 10A.
Can we do business before filing it?
No. The company may not commence business and may not exercise any borrowing powers until the declaration is filed.
What is attached to the form?
The company’s bank account statement showing all the credit entries for the subscription money received from every subscriber to the memorandum.
IMPS or NEFT receipts can be attached in place of the statement.
What is the consequence of not filing at all?
A penalty on the company and on the directors who let it commence business without the declaration, and the Registrar may strike the company off the register.
Neither of those is reversed by filing afterwards, though filing is what stops the daily officer penalty accruing.
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