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Incorporating a company in India is just the beginning of a long journey toward establishing a successful business. One of the critical compliance requirements that newly incorporated companies must fulfill is the filing of Form INC-20A, known as the Declaration for Commencement of Business. This form serves as a formal declaration that the company has received the subscription money for its shares and is ready to commence its business operations.
INC 20A is a form prescribed by the Ministry of Corporate Affairs (MCA), Government of India. It is a mandatory declaration that a company has to file after incorporation and before starting business operations.
The form must be submitted by all companies having a share capital and incorporated on or after November 2, 2018.
In simple words, this form tells the government that:
This step ensures that shell companies are filtered out and only genuine businesses begin operations.
Any Private Limited Company, Public Company, or One Person Company (OPC) that:
If your company does not have share capital (which is rare), this form is not applicable to you.
Form INC 20A must be filed within 180 days from the date of incorporation of the company.
For example, if your company was incorporated on January 1, 2025, you must file INC 20A by June 30, 2025.
It is advisable not to wait till the last day, as delays can attract penalties and restrict your business operations.
It is a legal requirement under Section 10A of the Companies Act, 2013. Not filing it means your company is not authorized to start business.
Missing the INC 20A deadline will result in financial penalties for both the company and its directors.
You must show proof that the company received share money in its official bank account. This ensures the company is financially active.
Non-compliance can lead to directors being labeled as defaulting officers, which affects their reputation and ability to serve on other company boards
Filing Form INC 20A is simple if you follow the correct steps. Here’s how:
Once your company is incorporated, open a current account in the company’s name. Ensure that all subscribers deposit the promised share capital.
You’ll need a bank statement or certificate showing that the share capital amount has been credited to the company’s bank account.
A director of the company must sign a declaration stating that:
This declaration is made through Form INC 20A, which must be filed online.
You must attach the following documents with the form:
The government fee depends on your company’s authorized share capital:
| Share Capital | Fees (INR) |
|---|---|
| Up to ₹1,00,000 | ₹200 |
| ₹1,00,001 to ₹4,99,999 | ₹300 |
| ₹5,00,000 to ₹24,99,999 | ₹400 |
| ₹25,00,000 to ₹99,99,999 | ₹500 |
| ₹1 Crore or more | ₹600 |
Note: These fees are exclusive of professional charges if you’re hiring a CA or CS.
Missing the filing deadline can have serious consequences:
A penalty of ₹50,000 will be levied.
Each director will be fined ₹1,000 per day, up to a maximum of ₹1,00,000.
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