Legal basis: Section 10A, Companies Act 2013 (inserted by Companies (Amendment) Ordinance 2018); Rule 23A, Companies (Incorporation) Rules 2014; Section 248(1) and Section 454, Companies Act 2013 — Effective: 2 November 2018. Source: mca.gov.in. Last reviewed by CA Harun Raaj: January 2025.
Every company incorporated in India with share capital on or after 2 November 2018 must file Form INC-20A — the Declaration of Commencement of Business — within 180 days from the date of incorporation. If your 180-day window has closed and you have not filed, your company is in default. This guide explains the penalties, the strike-off risk, and the exact steps to file now.
Who Must File INC-20A and When
Applicable to: Every company incorporated with share capital on or after 2 November 2018.
Deadline: 180 days from the date of the Certificate of Incorporation.
What you declare: A director declares that the paid-up share capital of the company has been received in the company's bank account from the subscribers.
What you cannot do until you file: Under Section 10A, the company cannot commence any business or exercise any borrowing powers. Contracts entered and loans drawn before INC-20A is filed may be legally questionable.
Key point: Filing INC-20A is not optional—it is a mandatory gating requirement before your company can legally conduct any business or borrow money.
Penalties for Missing the 180-Day Deadline
Section 10A(2) of the Companies Act 2013 imposes two simultaneous penalty streams on both the company and its officers:
Both streams run together. A company with two directors in default and a 30-day delay after the deadline faces: ₹50,000 (company) + ₹30,000 × 2 directors = ₹1,10,000 in adjudication penalties alone, before MCA portal late filing fees (which can reach 2× to 12× the normal fee for delays beyond 180 days).
These penalties are imposed by the Registrar of Companies under Section 454 separately from the INC-20A filing itself. Filing the form late does not erase the penalty order—it stops the daily director fine from accumulating further.
Strike-Off Risk Under Section 248(1)
This is the most serious consequence. If the Registrar of Companies has reasonable cause to believe a company is not carrying on business or operations, the ROC can issue a show-cause notice and initiate removal of the company's name under Section 248(1)(c). Non-filing of INC-20A is a clear indicator of dormancy.
A struck-off company cannot enter contracts, hold assets, or do anything in its corporate capacity. Revival requires a petition to the High Court or NCLT under Section 252—a lengthy and expensive process. Struck-off status also damages the company's reputation and may trigger scrutiny from banks and regulatory bodies.
Illustrative Example
XYZ Private Limited was incorporated in Mumbai on 1 March 2024 with paid-up capital of ₹1,00,000. Its 180-day window expired on 29 August 2024. As of 1 September 2024, INC-20A has not been filed. The company is in default. As of that date, the penalty stands at ₹50,000 (company) + ₹1,000 per director for Day 1. Each passing day adds ₹1,000 per director until the ₹1,00,000 director cap is reached. If filed on Day 60 after the deadline, the total penalty for a single director would be ₹50,000 + ₹60,000 = ₹1,10,000 before late filing fees. (This example is illustrative only.)
How to File INC-20A Now (Even If Late)
Step 1: Ensure paid-up capital is in the company bank account
- If the company bank account is not yet open, open one immediately.
- Each subscriber must transfer their share capital amount to the company account.
- Obtain a bank statement showing receipt of the subscribed capital.
Step 2: Prepare required documentation
- Bank statement showing receipt of paid-up share capital from subscribers.
- CA or Company Secretary certification as required by the form.
Step 3: File via MCA V3 portal
- Log in to mca.gov.in using your Business User account.
- Navigate to e-filing → select the company's CIN → Form INC-20A.
- Attach the bank statement and certification.
- Calculate and pay the applicable late filing fee (use the MCA fee calculator).
- Sign with the director's Digital Signature Certificate (DSC).
Step 4: Submit and wait for approval
- INC-20A is straight-through-processing (STP)-enabled on MCA V3; approval is typically automatic upon submission.
- The filing stops the daily director penalty from accumulating on that date onwards.
Step 5: Handle the penalty separately
- The ROC will issue a separate penalty order under Section 454 for the Section 10A(2) default.
- This penalty is not waived by late filing; it is assessed based on the delay period.
- If penalty notices arrive, engage a CA or Company Secretary to respond or pay as advised.
When Delay Coverage May Apply
Periodically, the MCA issues general circulars granting relaxation on overdue filings (for example, MCA General Circular 03/2026 covered overdue annual filings like AOC-4, MGT-7, and DPT-3). However, applicability to INC-20A is not universal. Do not assume INC-20A is covered under any relief circular without verifying directly with the MCA or a qualified CA or Company Secretary. If relief does apply, follow the circular's prescribed filing process and deadline strictly.
Key Clarifications
- GSTIN registration does not cure the INC-20A default. GST and Section 10A are independent statutory obligations.
- If subscribers never actually paid the share capital: They must transfer the capital to the company account now, and then file INC-20A with the bank statement. Consult a Company Secretary or CA on the appropriate disclosure if there has been any business activity prior to the capital receipt.
- Directors face civil penalties, not criminal prosecution under Section 10A(2). However, if the company conducted business or borrowed before filing, there may be additional legal exposure—seek professional counsel immediately.
I'm CA Harun Raaj. If this affects your company's compliance calendar, reach out.
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See Also
Frequently asked questions
Can I still file INC-20A after 180 days?
Yes. Section 10A does not impose an absolute bar on late filing. However, you will pay the adjudication penalty under Section 10A(2) (₹50,000 for the company + ₹1,000 per director per day of default, capped at ₹1,00,000 per director) and the applicable MCA late filing fee. File immediately on the MCA V3 portal to stop the daily director penalty from accumulating further.
What is the daily penalty for directors under Section 10A(2)?
Each director in default faces ₹1,000 per day of continuing default, with a cap of ₹1,00,000 per director. The company also faces a flat ₹50,000 penalty. Both run together. For a company with two directors in default for 60 days, the total would be ₹50,000 (company) + ₹60,000 (director 1) + ₹60,000 (director 2) = ₹1,70,000, before late filing fees.
Will my company be struck off if I don't file INC-20A?
Yes, strike-off is a serious risk. Under Section 248(1)(c), the Registrar of Companies can remove the company's name if there is reasonable cause to believe the company is not carrying on business or operations. Non-filing of INC-20A is a clear indicator of dormancy. A struck-off company cannot conduct any business or hold assets. Revival requires a High Court or NCLT petition under Section 252.
Does filing INC-20A late remove the penalty?
No. Filing INC-20A late stops the daily director penalty from accumulating **from that date onwards**, but the penalty accrued up to the filing date is assessed separately by the ROC under Section 454. The form filing and the penalty order are two separate proceedings.
What documents do I need to file INC-20A on the MCA portal?
You need a bank statement showing receipt of paid-up share capital from subscribers and, if required, CA or Company Secretary certification. Both should be attached to Form INC-20A on the MCA V3 portal. The form is straight-through-processing (STP)-enabled; approval is typically automatic upon submission with a valid director DSC.
Does GST registration satisfy the INC-20A requirement?
No. GST registration and Section 10A commencement of business are independent statutory obligations. A GSTIN does not satisfy or replace the INC-20A filing requirement.
What if subscribers have not actually paid the share capital yet?
The subscribers must transfer the paid-up share capital to the company bank account now. Once the transfer is complete and appears in the bank statement, file INC-20A with that statement. If the company has conducted any business or entered contracts before capital receipt, consult a Company Secretary or CA immediately on the appropriate disclosure and potential legal exposure.
Will directors face criminal prosecution for missing INC-20A?
Section 10A(2) carries civil adjudication penalties under Section 454, not criminal imprisonment. However, if the company has conducted business or borrowed money before filing INC-20A (in violation of Section 10), there may be additional legal exposure. Seek professional legal counsel immediately if this applies to your company.
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