Form INC-20A — Commencement of Business

Every company incorporated in India on or after 2 November 2018 with share capital — whether a private limited, public limited, OPC or Section 8 — is statutorily required to file Form INC-20A (Declaration for Commencement of Business) within 180 days of the date of incorporation. Until INC-20A is filed and approved by the Registrar of Companies, the company is legally barred from commencing any business activity, exercising any borrowing power, opening a regular operating current account, applying for GST registration without scrutiny, or signing customer contracts. A company with a fresh Certificate of Incorporation but no INC-20A is, in the eyes of the Companies Act, an entity that exists on paper but cannot legally trade.

The framework is set by Section 10A of the Companies Act, 2013 read with Rule 23A of the Companies (Incorporation) Rules, 2014. The directors must declare that every subscriber to the memorandum has paid in full the value of shares agreed to be taken by them — and the declaration must be supported by a bank statement showing the actual receipt of subscription money in the company's account. The form is certified by a practising professional (CA, CS or CMA in whole-time practice). Late filing attracts a hefty ₹50,000 penalty on the company plus ₹1,000 per day per director, capped at ₹1,00,000 per director — a 4-director company at 100 days of default accumulates ₹50,000 + ₹4,00,000 = ₹4,50,000 in cumulative penalty.

Beyond the rupee penalty, the more serious consequence is strike-off action under Section 248(1). The Registrar may initiate suo motu strike-off if INC-20A is not filed within 180 days; revival under Section 252 then requires NCLT application, ₹25,000+ legal cost, and 3-6 months. We file INC-20A end-to-end with bank-statement evidence and AOA / MOA alignment within 7-14 working days.

What INC-20A Declares

• Subscription Money Received in Full:: Every subscriber to the memorandum has paid the value of shares they agreed to take. If MOA showed Founder A subscribing to 5,000 shares of ₹10 face value, ₹50,000 must have moved from Founder A's bank to the company's bank.

• Bank Statement Evidence:: The company's bank statement showing each subscriber credit is mandatorily attached. The MCA portal will not approve INC-20A without it. The statement must clearly show subscriber name, transaction date, amount and credit to company account.

• Registered Office Verified:: The registered office declared at incorporation has been verified — usually evidenced by Form INC-22 if the office was not declared at SPICe+ stage.

• Professional Certification:: A practising CA / CS / CMA digitally signs the form, attesting that the declarations are true and the bank statement evidences receipt of subscription money.

Consequences of Missing the 180-Day Deadline

₹50,000 Penalty on the Company under Section 10A(2). ₹1,000 per day per director, capped at ₹1,00,000 per director — paid via the form itself at filing.

• Strike-Off Risk under Section 248(1):: Registrar may initiate suo motu strike-off; the company is removed from the register entirely; revival under Section 252 requires NCLT application and 3-6 months.

• Operational Lockdown:: Cannot legally borrow, current account restricted to subscription receipts, GST officer scrutiny on registration, customer contracts technically ultra vires until commencement is declared.

What Founders Get Wrong — and How to Avoid It

The single most common failure is founders forgetting that subscription money must actually be wired into the company account. SPICe+ incorporation papers show ₹1,00,000 paid-up on paper, but the cash never moves from founder account to company account. Without that bank credit, INC-20A cannot be filed truthfully and cannot be filed at all without bank-statement attachment. The fix is simple — within 30-60 days of incorporation, each subscriber wires their MOA-committed amount, the bank statement is downloaded, and INC-20A is filed comfortably within the 180-day window. We coordinate this end-to-end as part of post-incorporation onboarding.