Form INC-20A – Commencement of Business Declaration: Due Date, Process & Penalty (2026)
Introduction
After incorporating a company in India, obtaining the Certificate of Incorporation is only the first step. Before commencing business operations or exercising borrowing powers, certain companies are required to file Form INC-20A – Declaration for Commencement of Business with the Registrar of Companies (ROC).
Failure to file INC-20A within the prescribed timeline may result in significant penalties and may even lead to the removal of the company’s name from the Register of Companies.
This article explains the applicability, due date, filing process, required documents, penalties, and frequently asked questions relating to Form INC-20A.
What is Form INC-20A?
Form INC-20A is a declaration filed with the Registrar of Companies under Section 10A of the Companies Act, 2013.
Through this form, a director confirms that:
Every subscriber to the Memorandum of Association (MOA) has paid the subscription amount agreed to be taken by them; and
The company is eligible to commence its business activities.
Only after filing this declaration can an applicable company legally commence business and exercise its borrowing powers.
Who is Required to File Form INC-20A?
Form INC-20A is required to be filed by:
Companies incorporated after the applicability of Section 10A of the Companies Act, 2013 that have share capital.
Generally, it applies to:
Private Limited Companies
Public Limited Companies
One Person Companies (OPCs) having share capital
Companies not covered under Section 10A are not required to file this form.
Due Date for Filing INC-20A
The declaration must be filed within 180 days from the date of incorporation of the company.
For example:
Date of Incorporation: 10 January 2026
Due Date for INC-20A: 9 July 2026
Timely filing is essential to avoid penalties and regulatory action.
Preconditions for Filing INC-20A
Before filing the form, ensure that:
The company has received the subscription money from all subscribers.
The subscription amount has been credited to the company’s bank account.
A bank account has been opened in the name of the company.
Necessary supporting documents are available.
Documents Required
Generally, the following documents are required:
Bank Statement showing receipt of subscription money.
Proof of deposit of share subscription amount.
Board Resolution (where required).
Digital Signature Certificate (DSC) of a Director.
Details of the subscribers and share capital.
Filing Process
Step 1
Open a current bank account in the company’s name.
Step 2
Receive the subscription money from all subscribers as per the Memorandum of Association.
Step 3
Obtain the bank statement reflecting the receipt of funds.
Step 4
Prepare Form INC-20A.
Step 5
Attach the required supporting documents.
Step 6
Digitally sign the form using the Director’s DSC.
Step 7
File the form with the Registrar of Companies through the MCA portal and pay the prescribed filing fees.
Consequences of Non-Filing
If the company fails to file INC-20A within the prescribed period:
The Company becomes liable for statutory penalties.
Every officer in default may also be liable for penalties.
The Registrar may initiate action for removal of the company’s name if there are reasonable grounds to believe that the company is not carrying on any business or operations.
Penalty for Delay
Under Section 10A of the Companies Act, 2013:
Company: Penalty of ₹50,000.
Every Officer in Default: Penalty of ₹1,000 per day, subject to a maximum of ₹1,00,000.
Apart from monetary penalties, continued non-compliance may invite further regulatory action by the Registrar.
Can Business Start Before Filing INC-20A?
No.
A company to which Section 10A applies cannot commence business or exercise borrowing powers until Form INC-20A has been duly filed.
Practical Example
ABC Technologies Private Limited was incorporated on 15 February 2026.
The subscribers deposited the share capital into the company’s bank account on 20 February 2026.
The company should file Form INC-20A on or before 14 August 2026.
Upon successful filing, the company can legally commence its business operations and exercise borrowing powers.
Common Mistakes to Avoid
Delaying the opening of the company’s bank account.
Filing INC-20A before receipt of subscription money.
Failure to collect the full subscription amount.
Uploading incorrect or incomplete bank proof.
Missing the 180-day filing deadline.
Incorrect details of subscribers or share capital.
Best Practices
Open the bank account immediately after incorporation.
Ensure all subscribers transfer their share capital promptly.
Maintain proper banking records.
File INC-20A well before the due date.
Keep copies of all acknowledgements and supporting documents.
Seek professional assistance to ensure timely compliance.
Conclusion
Form INC-20A is one of the most important post-incorporation compliances for companies having share capital. It confirms that the subscribers have brought in the agreed share capital and enables the company to lawfully commence business and exercise borrowing powers.
Failure to comply within the prescribed timeline can lead to substantial penalties and possible regulatory action. Companies should therefore ensure that the subscription money is received promptly and the declaration is filed well before the 180-day deadline.
Navneet Kumar is a Senior Taxation professional in TAXAJ's Accounts & Taxation team. With over six years of industry experience, Navneet supports clients on tax compliance, filings and advisory. TAXAJ is a multi-disciplinary consulting firm spanning finance, taxation, legal, secretarial, FEMA and IPR, with offices in Delhi, Bihar, Bangalore and Goa.
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