After incorporation, a company cannot start business or exercise borrowing powers until it files Form INC-20A — the declaration for commencement of business — with the MCA.
This guide explains INC-20A, its timeline and the penalty for missing it.
What is INC-20A?
INC-20A is a declaration by a director that every subscriber has paid the value of shares agreed to be taken. It must be filed within 180 days of incorporation and verified by a professional.
Until it is filed, the company should not commence operations or borrow.
| Timeline | Within 180 days of incorporation |
|---|---|
| Prerequisite | Subscription money deposited in the company bank account |
| Certification | By a practising CA/CS/CMA |
Penalties for non-compliance
- The company can be fined ₹50,000, and each officer in default ₹1,000 per day up to ₹1,00,000
- The ROC may initiate strike-off for non-filing
Frequently asked questions
When must INC-20A be filed?
Within 180 days of the date of incorporation, after the subscribers deposit their share capital.
Can a company operate before filing INC-20A?
No. It should not commence business or borrow until INC-20A is filed.