Commencement of Business (INC-20A)

Your company is incorporated, the Certificate of Incorporation is in your hands, and it feels like the hard work is done. But under Section 10A of the Companies Act, 2013, your company cannot legally start doing business until every subscriber has paid in full for their shares — and you have told the Registrar of Companies so, in writing, via Form INC-20A. You have exactly 180 days from the date of incorporation to file it.

Miss that window and two things happen at once: a flat ₹50,000 penalty lands on the company, and the Registrar gains the power to strike your company off the register under Section 248(1). For a freshly-incorporated startup, that means losing the legal entity before you have issued a single invoice or signed a single contract.

At a Glance

• Who must file: Every company with share capital incorporated on or after 2 November 2018 — private limited, public limited, and OPC — with no exemption for turnover or industry.
• Governing law: Section 10A, Companies Act 2013; Rule 23A, Companies (Incorporation) Rules 2014.
• Filing window: Within 180 days of the date shown on the Certificate of Incorporation — no extensions are available under the Act.
• Penalty for default: ₹50,000 flat on the company plus ₹1,000 per day per director (capped at ₹1,00,000 per director) under Section 10A(2).
• Strike-off risk: Registrar may initiate suo motu removal under Section 248(1) if business has not commenced within 180 days of incorporation.
• Who certifies: Authorised director (Class-3 DSC) plus a practising CA, CS, or CMA who certifies the form under Rule 23A.
• Typical ROC approval: 3-7 working days after upload on the MCA V3 portal once documentation is complete.

What's New for FY 2026-27

The MCA V3 portal is the only route for INC-20A, and several surrounding obligations have tightened since FY 2024-25.

• MCA V3 fully stable: INC-20A is processed end-to-end on V3 infrastructure. Earlier migration friction between V2 and V3 portals is resolved; first-attempt approvals are routine when documentation is clean and reconciled.
• Demat compliance from incorporation: Non-small private companies incorporated in FY 2025-26 onward must comply with Rule 9B dematerialisation requirements under the Companies (Prospectus and Allotment of Securities) Rules. INC-20A approval is a prerequisite before any share issuance or demat account setup can proceed — the sequence matters.
• DPDP Act, 2023 readiness from day one: Companies collecting personal data at onboarding must document their data-handling policy before commencing business. Legal Suvidha's INC-20A engagement now includes a basic Digital Personal Data Protection Act checklist so your company starts on solid footing.
• AGILE-PRO-S does not replace INC-20A: If you used AGILE-PRO-S during SPICe+ to obtain GST registration and a bank account, that is a separate declaration entirely. Section 10A compliance is independent — GST registration does not satisfy or substitute for the INC-20A filing requirement, and many founders miss this distinction.
• Updated MCA Master Data visibility: Post-approval, your company's status on MCA V3 reads 'Active - Compliant,' publicly visible to banks, NBFCs, investors, and counterparties running a CIN lookup. An unfiled INC-20A shows as a pending compliance item — visible to anyone who checks before onboarding or diligence.

Who Must File INC-20A — and Why It Cannot Wait

• Every Pvt Ltd and Public Ltd with share capital: Incorporated on or after 2 November 2018 — no turnover threshold, sector exemption, or startup status changes this. If your company has a CIN dated after that date and has share capital, this form is mandatory.
• One Person Companies: Section 10A applies in full to an OPC. The single subscriber — typically also the sole director — must transfer the full subscription amount to the company's current account before the declaration is filed.
• Companies with foreign subscribers: A Foreign Inward Remittance Certificate (FIRC) issued by the receiving bank documents a foreign subscriber's credit in place of a domestic bank entry. Both the bank statement and the FIRC must appear in the evidence pack.
• Pre-revenue startups: The obligation runs from the date of incorporation, not from when commercial activity begins. 'We haven't started operations yet' does not pause the 180-day clock — the penalty accrues regardless.
• Companies still awaiting a bank account: Subscription money must actually hit the company's current account before the form can be filed. If account opening or subscriber transfers are running late, get them resolved immediately — every day counts against the limit.
• Companies approaching a fundraising round: Angels, VCs, and lenders run MCA Master Data checks as standard diligence. An INC-20A pending flag during term-sheet discussions can delay or derail a funding round — clear this well before fundraising conversations begin.

How It Actually Works

From document collection to ROC approval, here is exactly what happens at each stage.

Step 1: Incorporation Document Review

We pull your Certificate of Incorporation, MOA, AOA, SPICe+ approval, and subscriber schedule on day one. The subscriber list — names, shares subscribed, and face value — is cross-checked against the MOA to confirm capital figures match the original declaration exactly. Any discrepancy is caught and corrected before the form is drafted.

Step 2: Subscription Money Confirmation

Each subscriber named in the MOA must have transferred their exact subscription amount to the company's current account. We verify each credit line-by-line against the subscriber schedule. If any subscriber has not yet transferred, we flag it immediately — you have a defined window to complete all transfers before the 180-day clock expires.

Step 3: Bank Statement Evidence Preparation

The bank statement attached to INC-20A must clearly show each credit with the subscriber's name, date, and amount matching the MOA schedule exactly. We prepare a clean evidence pack: certified bank statement PDF, FIRC copies for any foreign subscribers, and a subscriber-wise credit reconciliation table. This is the most common rejection point; a fully reconciled pack means first-attempt approval.

Step 4: Form INC-20A Preparation

The form is populated with your CIN, registered office address, authorised capital, paid-up capital, and subscriber-wise declaration. If your registered office was not fully confirmed at the SPICe+ stage, Form INC-22 is prepared and filed at the same time — both forms share much of the same supporting evidence, so there is no duplication of effort.

Step 5: Professional Certification and DSC Application

A practising CA, CS, or CMA certifies the form under Rule 23A. Your authorised director applies their Class-3 DSC. The professional's digital signature confirms the declaration is accurate and the evidence on record is in order.

Step 6: MCA V3 Portal Filing and SRN Generation

The completed, signed form is uploaded to the MCA V3 portal. Government fees are paid, a Service Request Number (SRN) is generated, and a timestamped submission acknowledgement is preserved. We actively track the SRN status until the ROC issues its approval — you are not left wondering.

Step 7: Approval and Compliance Calendar Handover

Once the ROC approves INC-20A — typically 3-7 working days after upload — MCA Master Data updates to 'Active - Compliant.' We deliver the approval certificate, a complete evidence file, and a 12-month compliance calendar covering ADT-1, first board meeting, AOC-4, MGT-7A, and MSME-1 deadlines for your first year.

A Real Example: Three-Subscriber Startup, Filed on Day 21

Here is how a clean INC-20A plays out in practice — and what the contrast looks like when a company files late.

• Day 1 — 1 August 2025: Incorporation. 180-day clock starts. Statutory deadline: 28 January 2026. Three Indian subscribers: Founder A (10,000 shares × ₹10 = ₹1,00,000), Founder B (5,000 shares × ₹10 = ₹50,000), Investor C (5,000 shares × ₹10 = ₹50,000). Total subscription: ₹2,00,000.
• Day 18: Current account opened. All three subscribers transfer their amounts within one week. Bank statement shows three credits totalling ₹2,00,000, each clearly identified by subscriber name.
• Day 20: Evidence pack prepared. Subscriber-wise credit reconciliation confirmed against the MOA schedule. Zero discrepancies found.
• Day 21: Form INC-20A filed on MCA V3. Government fee: ₹400 (authorised capital ₹5-25 lakh bracket). SRN generated. Timestamped acknowledgement saved.
• Day 27: ROC approves INC-20A. MCA Master Data: 'Active - Compliant.' Company can now legally commence business, exercise borrowing powers, and open a fully operational current account for commercial use.
• Outcome: Zero penalty. Zero strike-off risk. Filed 152 days before the statutory deadline. First board meeting and ADT-1 auditor appointment scheduled within 10 days.

Compare that with a company that waits until day 200: ₹50,000 company penalty plus 20 days of per-director default charges before the per-director cap kicks in. That is entirely avoidable cost for a form that takes under a week to file once the bank statement is in hand.

After INC-20A: What Comes Next in Your First Year

INC-20A approval is the starting line, not the finish. Your company enters its standard compliance cycle the day the form is approved.

• ADT-1 (Auditor Appointment): File within 30 days of the first board meeting, which itself must happen within 30 days of incorporation. ADT-1 appoints your statutory auditor under Section 139 of the Companies Act — a separate ROC obligation that many new companies miss.
• First Board Meeting: Must take place within 30 days of incorporation. Directors attend in person or by video conference; minutes must be recorded, signed, and maintained in the statutory register.
• MSME-1: If any supplier is a registered MSME, the half-yearly outstanding payment return must be filed with MCA. This is a common oversight for new companies setting up vendor relationships in their first quarter.
• DPDP Compliance: From FY 2026-27, companies collecting personal data need a written data-handling policy before commencing operations. There is no specific MCA form yet, but documented internal compliance is required from the first day of business under the Digital Personal Data Protection Act, 2023.
• MGT-7A or MGT-7 (Annual Return): Due within 60 days of the Annual General Meeting. Private companies with paid-up capital below ₹10 crore and turnover below ₹50 crore file the abridged MGT-7A; larger companies file MGT-7.
• AOC-4 (Financial Statements): Due within 30 days of the AGM. For a company incorporated mid-year, the first AOC-4 covers the stub period from the date of incorporation to 31 March.
• Demat for non-small companies: If your company does not qualify as a 'small company' under Section 2(85) of the Companies Act, comply with Rule 9B dematerialisation requirements by 30 September of the first full financial year — failure attracts separate ROC penalties.

INC-20A approval triggers your compliance clock. Your first board meeting, auditor appointment, and DPDP readiness documentation should all be completed within 30-60 days of approval — not deferred to the end of the financial year.

Where INC-20A Filings Go Wrong

Most rejections and penalties trace back to a small, avoidable set of errors.

• Bank statement amount mismatch: The amounts in the form do not match the bank credits exactly. Even a ₹100 discrepancy causes rejection at the ROC level. Reconcile the subscriber schedule against the statement before the form is ever drafted.
• Wrong CIN or incorporation date: Copied incorrectly from the Certificate of Incorporation. The MCA V3 portal rejects the form at the SRN stage, and re-filing burns days against the 180-day window.
• Incomplete subscriber transfers: One subscriber has not yet transferred their amount, so the bank evidence is incomplete. The form cannot be filed until every credit from every subscriber appears on the statement.
• Expired director DSC: A Class-3 DSC that expired after incorporation cannot sign the form. Renewal takes 3-5 working days — a minor issue if caught early, a serious problem if discovered on day 175.
• Registered office address mismatch: The address entered on INC-20A does not match the utility bill or the INC-22 filing on record. This triggers ROC queries and delays approval by days or weeks.
• Incorrect late-filing penalty calculation: INC-20A filed after 180 days must include the penalty amount computed per day per director. Under-paying the penalty causes rejection; the re-filing delay compounds the penalty further.
• Treating incorporation as commencement: Signing customer contracts or issuing GST invoices before INC-20A approval creates an ultra vires (beyond the company's legal powers) exposure. This surfaces at investor or acquisition diligence — sometimes years after the fact — and requires a clean-up that could have been avoided entirely.

What You Receive at the End

• INC-20A Approval Certificate issued by the Registrar of Companies
• Updated MCA Master Data extract confirming 'Active - Compliant' status
• Filing SRN and timestamped MCA V3 submission acknowledgement
• Reconciled bank evidence pack with subscriber-wise credit table and source documents
• INC-22 filing acknowledgement, if registered office was confirmed concurrently
• 12-month post-incorporation compliance calendar covering ADT-1, first board meeting, AOC-4, MGT-7A, and MSME-1
• Director DSC usage log for the filing
• Subscriber-wise paid-up capital schedule for future fundraising and investor diligence reference

How to Get Started

Share your Certificate of Incorporation and company current account details. We run an immediate checklist against your MOA subscriber schedule and flag anything that needs to be resolved before your 180-day window closes — at no obligation to proceed further.

Once you confirm, our team handles documentation review, subscriber transfer coordination, form preparation, professional certification, and MCA V3 filing end-to-end. You receive the ROC approval certificate, a clean evidence file, and your first-year compliance calendar within 7-14 working days of engagement start.