What Is INC-20A (Declaration of Commencement of Business)?
INC-20A is the e-form a company with share capital must file with the Registrar of Companies within one hundred eighty days of its date of incorporation. Filing it declares two things: that every subscriber to the memorandum has paid the value of the shares they agreed to take, and that the company has filed with the Registrar a verification of its registered office. Until it is filed, the company cannot lawfully commence any business or exercise any borrowing power.
The Ministry of Corporate Affairs (MCA) lists the form on its company forms directory as "Declaration for commencement of business." The form exists only because of a single provision added to company law in November 2018: section 10A of the Companies Act, 2013.
Legal Basis
Section 10A of the Companies Act, 2013
Section 10A, headed "Commencement of business, etc.", was inserted by the Companies (Amendment) Act, 2019, with effect from 2 November 2018. It applies only to a company incorporated on or after that date that has a share capital. The official text of section 10A reads:
"A company incorporated after the commencement of the Companies (Amendment) Act, 2019 and having a share capital shall not commence any business or exercise any borrowing powers unless— (a) a declaration is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in such form and verified in such manner as may be prescribed, with the Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration; and (b) the company has filed with the Registrar a verification of its registered office as provided in sub-section (2) of section 12."
Two separate confirmations are therefore bundled into one filing: that subscription money has actually been received, and that the registered office has been verified under section 12(2) — ordinarily the same address proof filed at incorporation, refreshed by an INC-22 if the office has since moved.
Rule 23A of the Companies (Incorporation) Rules, 2014
Rule 23A of the Companies (Incorporation) Rules, 2014 is the rule section 10A(1)(a) points to when it refers to a declaration made "in such form and verified in such manner as may be prescribed." It is Rule 23A that fixes Form INC-20A as that form, requires it to be filed electronically on the MCA portal, and requires the declaration to be supported by proof that the subscription money has actually been received into the company's account. A director who signs the declaration without that proof in hand is certifying a fact the company cannot yet support.
Who Must File — and Who Is Exempt
Section 10A applies only to a company "having a share capital." A company incorporated without share capital — most commonly a section 8 not-for-profit company limited by guarantee — falls outside section 10A and has no INC-20A obligation. Every other company incorporated on or after 2 November 2018 with share capital is covered: a wholly foreign-owned private limited company set up through SPICe+, a joint venture, and a One Person Company all need to file.
A company incorporated before 2 November 2018 was never brought within section 10A and carries no INC-20A obligation for that incorporation, regardless of when it actually began trading.
Filing Timeline and What Counts as Compliance
The 180-day clock starts on the date of incorporation shown on the Certificate of Incorporation — not on the date the company actually starts trading, and not on the date the bank account is opened. Section 10A(1)(a) fixes the period at one hundred eighty days and the text carries no proviso allowing an extension, so a company that needs longer to receive subscription money has no statutory route to push the deadline back. The only way to stay compliant is to make sure the money actually lands inside the window.
For a foreign-owned subsidiary this is usually the tightest part of the timeline: the inbound remittance of paid-up capital from the foreign parent has to clear, be credited to the Indian company's bank account, and be reported under FEMA before the declaration can be truthfully made. International wire transfers, KYC checks at the receiving bank, and FEMA reporting can each add days, so treating day 180 as the filing date rather than a backstop leaves no room for a delayed remittance.
Consequences of Not Filing
Section 10A(2) fixes what happens on default:
"If any default is made in complying with the requirements of this section, the company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees."
That penalty is separate from, and does not exhaust, the Registrar's power under section 10A(3):
"Where no declaration has been filed with the Registrar under clause (a) of sub-section (1) within a period of one hundred and eighty days of the date of incorporation of the company and the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may, without prejudice to the provisions of sub-section (2), initiate action for the removal of the name of the company from the register of companies under Chapter XVIII."
In practice, an INC-20A default is not just a monetary penalty. It hands the Registrar an independent ground to move toward a strike-off under Chapter XVIII (section 248) of the Act, on top of — not instead of — the per-day penalty on every officer in default.
Why It Matters for Foreign Companies and Investors
Foreign investors setting up an Indian subsidiary tend to treat incorporation itself as the finish line, when INC-20A is really the next checkpoint. A newly incorporated company that cannot yet show paid-up subscription money — because the parent's remittance is still working through cross-border banking and FEMA reporting — is not yet allowed to sign contracts, invoice a customer, hire staff against a payroll run, or draw on any credit facility in its own name. Missing the 180-day window converts a purely administrative slip into a compounding penalty and a live strike-off risk, at exactly the moment the business is trying to start operating.
Because the deadline runs from the incorporation date rather than from any operational milestone, foreign parents should treat capital remittance as the first task after incorporation, not an item to schedule around other priorities.
Practical Example
A US parent incorporates an Indian wholly-owned subsidiary through SPICe+ on 1 March. The subsidiary's two subscribers to the memorandum have agreed to take shares worth INR 1 lakh each. The remittance from the US parent is initiated on day 150 rather than day 30, and after wire transfer and FEMA reporting delays, the funds are credited to the subsidiary's Indian bank account on day 172. The company files INC-20A on day 176, attaching proof that the subscription money was received, comfortably inside the 180-day window. Had the remittance cleared on day 185 instead, the company would already be in default under section 10A(2) — and, if the Registrar formed the view the company was not carrying on business, exposed to strike-off action under section 10A(3) as well.
Common Mistakes
- Starting the capital remittance late. Because the 180-day clock runs from incorporation, not from when the parent gets around to wiring funds, a remittance started in month five is already a risk.
- Assuming the deadline can be extended. Section 10A(1)(a) has no proviso for extension. There is no statutory application to file for extra time.
- Filing before the money has actually arrived. The declaration certifies that subscription money has been paid as of the date of the declaration — filing on the strength of a remittance that is still in transit misstates the position.
- Treating the penalty as the only risk. Section 10A(3) gives the Registrar a separate strike-off trigger that operates independently of the monetary penalty.
- Forgetting companies without share capital are exempt. Section 8 companies limited by guarantee, without share capital, do not fall within section 10A at all — filing INC-20A for one is unnecessary.
Frequently Asked Questions
Does INC-20A apply to every newly incorporated company?
Only to companies with share capital incorporated on or after 2 November 2018. A company incorporated before that date has no INC-20A obligation, and a company without share capital — such as a section 8 company limited by guarantee — falls outside section 10A entirely and never needs to file it.
Can the 180-day deadline be extended if the parent's remittance is delayed?
No. Section 10A(1)(a) fixes the period at one hundred eighty days from the date of incorporation and contains no proviso allowing an extension. If subscription money has not been received and the declaration is not filed within that window, the company is already in default under section 10A(2).
What is the penalty for not filing INC-20A on time?
Under section 10A(2), the company becomes liable to a penalty of fifty thousand rupees, and every officer in default becomes liable to a penalty of one thousand rupees for each day the default continues, capped at one lakh rupees per officer.
Can the Registrar strike a company off the register just for missing INC-20A?
Yes, potentially. Section 10A(3) lets the Registrar initiate strike-off action under Chapter XVIII of the Act if no declaration is filed within 180 days and the Registrar has reasonable cause to believe the company is not carrying on any business. This power applies without prejudice to the separate penalty under section 10A(2).
What proof does a company need before filing INC-20A?
Rule 23A requires the declaration to be supported by proof that the subscription money agreed to be taken by each subscriber to the memorandum has actually been received. A director should not sign the declaration until that proof is in hand, since the filing certifies receipt as a fact as of the date of filing.
See also: Certificate of Incorporation, SPICe+, and Paid-Up Capital.
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