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INC-20A: declaration for commencement of business

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Every company with share capital must file INC-20A within 180 days of incorporation, declaring that each shareholder has paid for the shares they subscribed to. Until it is filed, the company cannot legally start business or borrow. It is the first and most commonly missed compliance after incorporation.

What INC-20A declares

Section 10A of the Companies Act requires a director to declare that every subscriber to the MOA has paid the value of the shares agreed to be taken by them. In practice, this means:

  1. 1.Open the company bank account.
  2. 2.Each subscriber transfers their subscription money from their own account to the company's account.
  3. 3.A director files INC-20A, attaching the bank statement showing these receipts.

The form is signed by a director with DSC. For companies incorporated with capital above a threshold, it may need certification by a practising professional.

Penalties for missing it

WhoPenalty
Company₹50,000
Each officer in default₹1,000 per day of default, up to ₹1 lakh

Beyond the penalty, if the Registrar believes the company is not carrying on business, it can start proceedings to strike the company off under Chapter XVIII.

Frequently asked questions

No. It applies to companies with share capital, which includes almost all private limited companies.

It should be paid through banking channels so the bank statement shows it clearly. Cash deposits make the declaration harder to support.

File as soon as the money is received, with additional fees, and be prepared for penalty proceedings. Do not file a false declaration.

This guide is general information, not legal advice. Government fees and procedures change; confirm current figures before you file.

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