Long-form Regulatory Guide #2

INC-20A: The 180-Day Commencement Form That Can Kill Your Company Before It Starts

Educational only. Not legal advice. Talk to your CA/CS before filing.

Why investors care about a “boring” ROC form

You can have a great product and paying customers, but if your basic ROC hygiene is off, DD teams start smelling risk.

One of the quickest ways to look sloppy is to have an incorporated company that never filed Form INC-20A.

Under Section 10A of the Companies Act, 2013, any company with share capital incorporated after 2 November 2018 must file a declaration of commencement of business in Form INC-20A within 180 days of incorporation. https://www.bajajfinserv.in+4RegisterKaro+4Rajput Jain & Associates+4

Until you do that, the law says you should not commence business or borrow money.

Who needs to file INC-20A?

You usually must file if:

• Your company was incorporated on or after 2 November 2018, and

• It has share capital (typical for startups), and

• It’s not an exempt category (e.g. some older companies incorporated before the amendment). Rajput Jain & Associates+2RegisterKaro+2

Your CA/CS will confirm, but for almost all “new-age” Pvt Ltd startups, INC-20A is mandatory.

Key requirements before filing

Your CA/CS will typically check: RegisterKaro+5Rajput Jain & Associates+5cleartax+5

1. Subscription money depositedThe subscribers named in the MOA must actually deposit the agreed capital into the company’s bank account.

2. Bank proofA bank statement or certificate clearly showing the receipt of subscription money.

3. Board resolutionDirectors pass a resolution approving the filing of INC-20A.

4. Professional certificationThe form is certified by a practicing CA / CS / CMA as required.

Your registered office verification (Form INC-22) should also be complete.

Deadline and penalties

• Deadline: 180 days from the date of incorporation. EZTax India+2Rajput Jain & Associates+2

If you miss it, consequences can include:

• Penalty on the company: usually ₹50,000. Rajput Jain & Associates+3cleartax+3https://www.bajajfinserv.in+3

• Penalty on each officer in default: ₹1,000 per day of continuing default, capped at ₹1,00,000. TaxGuru+3cleartax+3LinkedIn+3

• The RoC may start strike-off proceedings for non-commencement of business under Section 248. Banks may also refuse to open/keep current accounts without a valid INC-20A. LinkedIn+2https://www.bajajfinserv.in+2

This is why DD teams love checking it: one quick MCA search shows whether you handled Day 0 hygiene properly.

Typical mistakes founders make

• “We thought the CA did it” – and discover during DD that INC-20A was never filed.

• Subscription paid in cash without a clean trail or wrong narration.

• Using a founder’s personal account instead of the company account for early transactions.

• Waiting months to open the company bank account, then running out the 180-day clock.

If you’re already late

Don’t panic, but don’t ignore it.

• Talk to your CA/CS immediately.

• They may help you file INC-20A with additional fees and handle compounding / adjudication if the RoC has already initiated action. jvandassociates.in+2Rajput Jain & Associates+2

• In DD, be transparent: “We identified this, filed with penalties, and it’s now regularised.”

Investors don’t expect perfection; they expect you not to hide mess.

Simple founder checklist for INC-20A

•  Is our company incorporated after 2 November 2018 and does it have share capital?

•  Have all subscribers actually paid their subscription money into the company bank account?

•  Have we filed INC-20A within 180 days of incorporation?

•  Do we have the MCA acknowledgement and supporting bank proof handy in our data room?

Reminder: This post is general information, not legal advice. Always coordinate with your CA/CS for real filings.