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Form INC-20A: Declaration of Commencement of Business

form inc 1

E- Form INC-20A, declaration for commencement of business is required to be filed pursuant to Section 10A (1) (a) of the Companies Act, 2013 and Rule 23A of the Companies (Incorporation) Rules, 2014.

As per new section inserted after section 10 of the Companies Act, 2013, a company incorporated on or after November 2, 2018, having share capital shall not commence its business or exercise any borrowing powers unless a declaration is filed by the directors within 180 days from date of incorporation of company in INC form 20A (notified on 26/01/2019), with the Registrar of Companies that ‘every subscriber to the MOA has paid the value of the shares agreed to be taken by him on the date of making of such declaration” and the contents of the said form shall be verified by a Company Secretary or a Chartered Accountant or a Cost Accountant, in practice:

Form 20A is in STP Mode (Auto Approved) and Department will issue No Certificate for approval of Form 20A

  • Is filing of form INC 20A mandatory?
    Yes, it is mandatory to obtain certificate of commencement of business by filing form 20A within180 days from date of incorporation of a company.
  • Which companies are required to file form INC 20A?
  1. All the companies incorporated on or after November 2, 2018 and having a share capital are required to file form INC- 20A.
  2. All the companies incorporated before November 2, 2018 and limited by guarantee not having share capital shall not file form INC- 20A.
  • Documents / attachments required while filing Form INC-20A
  1.  Subscribers proof of payment for value of shares- The Company has to attach its Bank Account statement having all credit entries for receipt of subscription money received from all subscribers to MOA. If Bank Account statement is not available then the payments proofs like NEFT/IMPS receipts are valid or acceptable.
  2. Certificate of Registration issued by the RBI (Only in case of Non-Banking Financial Companies) / from other regulators.
  • Who can digitally sign the eForm?

       The form shall be signed by

  1. The Director of the company authorized by the Board of Directors of the Company
  2. Practicing professional (Chartered accountant / Cost accountant / Company secretary (in whole-time practice)
  • Penalties
    MCA has imposed different penalties on the Company as well as its Directors, in case of Non-filing of eForm INC-20A. These are given below-
Particulars Amount (in Rs.)
Penalty Levied on the Company 50,000/-
Penalty Levied on every officer in default 1,000/- per day of default up to a Maximum Rs.1,00,000/-
  • Consequences
    If the Company has not filed the Form INC-20A then the following consequences will be faced by the company:-
  1. Registrar may initiate action for the removal of the name of Company
  2. Company cannot borrow funds
  3. Company cannot start business
  • Fees for Filling of INC 20A
Nominal Share Capital Fees
Less than 1 Lacs Rs.200
1,00,000 – 4,99,999 Rs.300
5,00,000 – 24,99,999 Rs.400
25,00,000 – 99,99,999 Rs.500
1,00,00,000 or More Rs.600

Here, at AJSH we do assist our clients in registration / incorporation of a company, annual compliances of companies and related services. If you have any questions or want to know more how to set-up a company in India, please click here.


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