Form INC 20A explained: this guide covers what Form INC 20A means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Form 20A is a declaration that needs to be filed by the directors of the company at the time of the commencement of the business. It should be verified by a Chartered Accountant (CA) or Company Secretary (CS) or a Cost Accountant in practice.
As per the Companies (Amendment) Ordinance 2018, there is a requirement for all the companies registered on or after 2 November 2018 to file a certificate of commencement of business. Form 20A is a declaration filed by the directors within 180 days of the date of incorporation of the company. This is one of the most important compliances to follow as the penalties for non-filing are extremely high.
Legal Provisions
e-Form INC-20A 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 for the purpose of Declaration for Commencement of Business.
Section 10A: COMMENCEMENT OF BUSINESS etc.
A company incorporated after the commencement of the Companies (Amendment) Ordinance, 2018 and having a share capital shall not commence any business or exercise any borrowing powers unless-
- 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 e-form INC 20A, duly verified by the director and certified by a practicing professional, 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
- The company has filed with the Registrar a verification of its registered office as provided in sub-section (2) of section 12 (i.e., INC-22).
Rule 23A: DECLARATION AT THE TIME OF COMMENCEMENT OF BUSINESS.
The declaration under section 10A by a director shall be in Form No, INC-20A and shall be filed as provided in the Companies (Registration Offices and Fees) Rules, 2014 and the contents of the said form shall be verified by a Company Secretary or a Chartered Accountant or a Cost Accountant in practice.
Companies that are not required to file Form INC 20A
The following companies are not required to file Form 20A:
- Companies incorporated before 2 November 2018 ( i.e before the commencement of the Companies ( Amendment) Ordinance, 2018).
- Companies incorporated after 2nd November 2018 without share capital.
The time period for filing Form INC 20A
Every company required to file Form 20A shall file the same within 180 days of its incorporation.
Requirement and procedure
A certificate of business commencement has to be obtained within 180 days from the date of incorporation and an eForm has to be filed with the concerned ROC (Registrar Of Companies) regarding the same. A declaration under section 10A from the directors has to be provided in the form of a Board Resolution in the e-Form itself.
Also Read: All about Form DPT-3In addition to this, a proof of deposit of the paid-up share capital by the subscribers also needs to be attached to the e-form. If a company pursues objects requiring registration or approval from any sectoral regulators such as The Reserve Bank of India and Securities and Exchange Board of India etc, then it shall obtain such registration or approval along with the attached declaration.
The eForm has to be verified and certified by a practicing professional before filing with the ROC (Registrar Of Companies).
Penalties for Default
Section 10A(2) and (3) provides for the consequences of not filing the FORM INC 20A.
- Penalty for not filing
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 the number of one lakh rupees.
- The consequence for not filing the declaration
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 penalty for not filing as stated above, initiate action for the removal of the name of the company from the register of companies.
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Fee for filing Form 20A
Fee for filing eForm for companies having a share capital :
| Nominal Share Capital | Applicable Fees in (Rs.) |
|---|---|
| Where share capital is less than 1,00,000 | 200 |
| 1,00,000 or above but not exceeding 4,99,999 | 300 |
| 5,00,000 or above but not exceeding 24,99,999 | 400 |
| 25,00,000 or above but not exceeding 99,99,999 | 500 |
| 1,00,00,000 or above | 600 |
Fee for filing eForm for companies having no share capital:
In this case, the fees applicable are only Rs 200.
Additional fee (in case the form is not filed within the time)
| Nominal Share Capital | Applicable Fees in (Rs) |
|---|---|
| Up to 30 days | 2 times of normal fees |
| Above 30 but not exceeding 60 days | 4 times normal fees |
| Above 60 days but not exceeding 90 days | 6 times normal fees |
| Above 90 days but not exceeding 180 days | 10 times of normal fees |
| Above 180 days | 12 times of normal fees |