INC-20A and Strike Off explained: this guide covers what it 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.
A company with share capital that was incorporated after the commencement of the Companies (Amendment) Act, 2019 must file a declaration of commencement of business, Form INC-20A, within one hundred and eighty days of incorporation. Until it is filed, the company may not commence business or exercise borrowing powers. If the declaration stays unfiled and the Registrar has reasonable cause to believe the company is carrying on no business, he can start action to remove the company's name from the register under section 248. This guide explains both consequences, the penalty, and what a company that never started business can do about it.
This article is read as per the Companies Act, 2013 in the Ministry's consolidated text (last updated 29 July 2022), and the Rules as consolidated in the Ministry's e-book, consulted on 3 October 2026. The Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 are read as notified in 2016; later amendments should be checked. Our strike off team handles removal applications.
Section 10A(1) bars a company with share capital from commencing any business or exercising any borrowing powers until a director files a declaration, within one hundred and eighty days of incorporation, that every subscriber to the memorandum has paid for the shares agreed to be taken, and the company has filed the verification of its registered office under section 12(2). The penalty is fifty thousand rupees on the company and one thousand rupees a day on each officer in default, up to one lakh rupees (section 10A(2)). The Registrar may also begin removal of the name (section 10A(3)).
What section 10A requires
| Point | What the Act says |
|---|---|
| Which companies | A company incorporated after the commencement of the Companies (Amendment) Act, 2019 and having a share capital (section 10A(1)). |
| What may not happen | No commencement of any business and no exercise of borrowing powers until the conditions are met (section 10A(1)). |
| Declaration | Filed by a director within one hundred and eighty days of the date of incorporation, in the prescribed form, verified as prescribed, stating that every subscriber has paid the value of the shares agreed to be taken on the date of the declaration (section 10A(1)(a)). |
| Registered office | The company has filed the verification of its registered office as section 12(2) provides (section 10A(1)(b)). |
| Form | Rule 23A of the Incorporation Rules: Form INC-20A, filed as the Fees Rules provide, its contents verified by a company secretary, chartered accountant or cost accountant in practice. Where the objects need registration or approval from a sectoral regulator such as the Reserve Bank of India or the Securities and Exchange Board of India, that registration or approval is attached. |
| Penalty | Company: fifty thousand rupees. Every officer in default: one thousand rupees for each day during which the default continues, not exceeding one lakh rupees (section 10A(2)). |
| Registrar's power | If no declaration has been filed within one hundred and eighty days and the Registrar has reasonable cause to believe the company is not carrying on any business or operations, he may, without prejudice to the penalty, initiate action for removal of the name of the company under Chapter XVIII (section 10A(3)). |
Worked example. Nova Packaging Private Limited is incorporated with two subscribers. Its director does not file INC-20A by the one hundred and eightieth day. The company's penalty is fifty thousand rupees. If the default continues for forty days, the director in default owes 40 x 1,000 = Rs. 40,000. If it continues for one hundred and fifty days, the daily total would be 150 x 1,000 = Rs. 1,50,000, but section 10A(2) caps it at Rs. 1,00,000. The same facts, with no business done, also expose the company to action under section 248.
How strike off follows
Section 248(1) lets the Registrar who has reasonable cause to believe that any of these grounds exists send a notice to the company and all its directors:
| Ground in section 248(1) | Relevance to a new company |
|---|---|
| (a) The company has failed to commence its business within one year of incorporation | Direct match for a company that never started |
| (c) The company has carried on no business or operation for the two immediately preceding financial years and has made no application for dormant status under section 455 | Later years |
| (d) The subscribers have not paid the subscription they undertook and no declaration has been filed within one hundred and eighty days under section 10A(1) | Direct match for a missed INC-20A with unpaid subscription |
| (e) The company is not carrying on any business or operations, as revealed after physical verification under section 12(9) | Registered office check |
The notice states his intention to remove the name and asks for representations with copies of documents within thirty days from the date of the notice. Rule 3(2) and (3) of the Removal Rules (as notified in 2016) say the notice is in Form STK-1, sent to all directors at the addresses on record by registered post with acknowledgement due or by speed post, and gives the reasons. The notice is also published as section 248(4) provides, and the Registrar intimates the income-tax and other authorities and seeks objections within thirty days (rule 7(2)).
At the expiry of the time in the notice, unless cause to the contrary is shown, the Registrar may strike off the name and publish a notice in the Official Gazette, on which publication the company stands dissolved (section 248(5)). Before passing the order the Registrar satisfies himself that provision has been made to realise amounts due and to discharge liabilities, and may obtain undertakings from directors; the company's assets remain available for liabilities afterwards (section 248(6)). The liability of every director, manager or officer who exercised management powers, and of every member, continues as if the company had not been dissolved (section 248(7)). The Tribunal's power to wind up a struck-off company is saved (section 248(8)). Our article on director liability after strike off goes into this.
C-PACE. The Central Government established the Centre for Processing Accelerated Corporate Exit under section 396(1) by S.O. 1269(E) of 17 March 2023, in force from 1 April 2023; the notification names its location and states nothing further.
Can the company apply itself?
Yes, on any of the section 248(1) grounds, including the failure to commence business within one year. Section 248(2) requires that the company, after extinguishing all its liabilities, files an application in the prescribed manner after a special resolution or consent of seventy-five per cent of members in terms of paid-up share capital. Rule 4 of the Removal Rules (as notified in 2016) prescribes the application in Form STK-2 with a fee (this article states no fee), accompanied by an indemnity bond notarised by every director in Form STK-3, a statement of accounts of assets and liabilities made up to a day not more than thirty days before the application and certified by a chartered accountant, an affidavit in Form STK-4 by every director, a certified copy of the special resolution or the seventy-five per cent consent, and a statement of pending litigation. Rule 5 requires a director authorised by the Board to sign it; rule 6 requires certification by a professional in whole-time practice.
Companies that cannot use the route. The proviso to rule 3(1) lists companies not removable "under this rule and rule 4", among them listed companies, companies under inspection or investigation or with prosecutions pending, companies with outstanding public deposits, companies with charges pending for satisfaction, and companies registered under section 8. Section 248(3) separately says section 248(2) does not apply to a section 8 company. Later amendments to the 2016 rules should be checked before relying on any clause.
Need help with INC-20A or a strike-off notice?
If the declaration is overdue, a notice has arrived, or the company has no business and no liabilities left, we can examine which route fits and prepare the papers. Our strike off service covers the voluntary application and replies to notices.
Key takeaways
- INC-20A is due within one hundred and eighty days of incorporation for a company with share capital incorporated after the 2019 Amendment Act.
- Until it and the registered office verification are filed, no business and no borrowing powers.
- Penalty: fifty thousand rupees on the company and one thousand rupees a day on each officer in default, up to one lakh rupees.
- A missed declaration with no business invites a notice under section 248, with thirty days to respond.
- Strike off dissolves the company, but the directors' and members' liability continues.
Read next
- Section 10A: commencement of business declaration (INC-20A)
- INC-20A: commencement of business declaration
- Company strike off under section 248: complete procedure guide
- Funds left in a company before strike off: settling liabilities and returning money
Disclaimer: Based on the Companies Act, 2013 in the Ministry of Corporate Affairs consolidated text (last updated 29 July 2022), the Rules as consolidated in the Ministry's e-book and the other official texts named in this article, as consulted on 3 October 2026. Later amendments, notifications, circulars, forms and fees should be checked. Formats are general drafts to be adapted to the company's articles and facts. This article is general information, not legal advice; check the official text before acting.