The filing most new founders have never heard of — and it has real teeth
You have the certificate of incorporation, a PAN, a company bank account, and you are ready to sign your first contract. There is one form standing between you and legally being in business, and a surprising number of founders do not know it exists until a penalty notice explains it. It is Form INC-20A, the declaration of commencement of business, and until it is filed your company cannot legally start operations or borrow a single rupee. Miss the deadline and the exposure runs into ₹50,000-plus, with the Registrar empowered to strike the company off. This is what INC-20A is, who has to file it, and the practical sequence that keeps you on the right side of it.
What INC-20A actually declares
INC-20A was introduced by the Companies (Amendment) Ordinance, 2018 as Section 10A of the Companies Act, 2013. The declaration is narrow and specific: the directors confirm that every subscriber to the memorandum has paid the value of the shares they agreed to take. In plain terms — the founders promised, in the incorporation documents, to put a certain amount of share capital into the company; INC-20A is the company telling the Registrar that the money has actually arrived in the company's bank account. It is the proof that the company was not just registered on paper but genuinely capitalised.
Who has to file it — and who is exempt
The rule applies to every company incorporated on or after 2 November 2018 that has share capital. That covers essentially every ordinary Private Limited company and OPC formed in recent years. Two categories are exempt:
- Companies incorporated before 2 November 2018 — the section did not exist when they were formed, so it does not apply to them.
- Companies incorporated without share capital — for example a Section 8 (not-for-profit) company limited by guarantee without share capital has nothing to declare paid.
If your company was set up in the normal way with share capital in the last few years, assume you are in scope.
The 180-day deadline
The declaration must be filed within 180 days of the date of incorporation. That is the single date to put in your calendar the day the company is registered. It is generous on paper — roughly six months — but it depends on one thing happening first: the subscribers have to actually deposit their agreed share capital into the company's bank account, because INC-20A cannot honestly be filed until they have. Founders who leave the capital "on paper" and never fund the account are the ones who run out of the 180 days.
What you attach: proof the money is really there
The form is not just a tick-box declaration; it carries evidence. You attach proof that the paid-up share capital has been deposited by the subscribers — in practice, the company's bank statement showing each subscriber's capital contribution credited to the account. There is a practical trap here worth knowing: the bank statement you rely on should ideally show only the capital transfers from the shareholders, with no other business transactions mixed in, because the whole point is to evidence the subscription money cleanly. The sensible sequence is to open the account, have the subscribers transfer their share money in, capture that statement, and only then start running other transactions through the account.
It has to be certified by a professional
INC-20A cannot be self-filed on a bare declaration. It must be verified and digitally certified by a practising professional — a Chartered Accountant, Company Secretary or Cost Accountant — who confirms the particulars are correct. This is a deliberate check: the professional is putting their certification behind the statement that the capital has genuinely been received.
The two things you legally cannot do until it is filed
This is why the form matters rather than being one more piece of paperwork. Under Section 10A, until INC-20A is filed a company:
- cannot commence any business; and
- cannot exercise any borrowing powers — no loans, no credit facilities.
So a company that starts trading or takes a loan before filing has technically acted beyond its powers. For a startup about to raise or borrow, this is not academic: a lender or investor's diligence will check that INC-20A is on file before money moves.
What it costs to miss
The penalty is one of the heavier ones in the first-year calendar. On default, the company is liable to a penalty of ₹50,000, and every officer in default is liable to ₹1,000 per day, up to a maximum of ₹1 lakh. Worse than the money is the existential risk: where the Registrar has reasonable cause to believe a company has not filed INC-20A and is not carrying on business, they may initiate action to strike the company off the register under Section 248. A forgotten form can, left long enough, end the company.
The practical sequence that keeps you clean
Handled properly, INC-20A is straightforward. The order that works:
- Incorporate the company and obtain the certificate, PAN and TAN.
- Open the company current account.
- Have every subscriber transfer their agreed share capital into that account — before any other transactions run through it.
- Take the bank statement evidencing those capital credits.
- Have your CA or CS certify and file INC-20A, well inside the 180 days.
- Only then commence business and, if needed, borrow.
Where this sits in the compliance year
INC-20A is the very first entry in a Private Limited company's compliance life, alongside appointing the first auditor within 30 days of incorporation. Everything that follows — DPT-3, DIR-3 KYC, AOC-4, MGT-7 and the rest — is set out in our Private Limited compliance calendar. If you are still choosing a structure and weighing this compliance load, our comparison of the five business structures explains why the company form carries it, and the guide to starting a business in India covers the incorporation itself.
How we handle it at RDA, Baner
At RDA Advisory, Baner, INC-20A is part of how we hand a company over ready to trade. When we incorporate for a client we set the 180-day clock in their calendar, guide the subscribers on funding the account cleanly, prepare the bank-statement evidence, and certify and file the declaration well before the deadline — so the company can commence business and borrow without a gap in its powers. If you incorporated elsewhere and are not sure whether it was ever filed, we will check your master data and fix it. Office No. 102, Snehraj Apartment, Baner, Pune 411045 · call +91 77570 45059.
Just incorporated? File INC-20A before the 180 days run out
Registered a company in Pune and not sure if you can legally start trading yet? RDA checks your incorporation date, gets the share capital funded and evidenced correctly, and files INC-20A so your commencement and borrowing powers are clean. Book a consult at rdatax.in or call +91 77570 45059 — RDA Advisory, Baner, Pune. See the full first-year picture in our compliance calendar for a Private Limited company.
Verification note: The requirements stated here are based on Section 10A of the Companies Act, 2013 (inserted by the Companies (Amendment) Ordinance, 2018) and the rules made under it, as administered by the Ministry of Corporate Affairs (mca.gov.in): the filing of the declaration of commencement of business in Form INC-20A within 180 days of incorporation, confirming that every subscriber to the memorandum has paid the value of the shares agreed to be taken; the application of the section to companies incorporated on or after 2 November 2018 having share capital, and the exemption of companies incorporated before that date and companies incorporated without share capital; the attachment of proof of deposit of the paid-up share capital and certification of the form by a practising Chartered Accountant, Company Secretary or Cost Accountant; the bar on commencing business or exercising borrowing powers until the declaration is filed; the penalty of ₹50,000 on the company and ₹1,000 per day on every officer in default up to ₹1 lakh; and the Registrar's power under Section 248 to remove the name of a company believed not to be carrying on business. Provisions, fees and forms are periodically amended by the MCA; confirm the current position for your company with your CA or company secretary. This is general information, not legal or professional advice.
