A company can receive its Certificate of Incorporation and still not be free to commence business or exercise borrowing powers until an important post-incorporation compliance is completed.
For companies incorporated with share capital, INC-20A is one of the first MCA compliances that management should put on its post-incorporation checklist.
INC-20A is the Declaration for Commencement of Business filed with the Registrar of Companies. It confirms that the subscribers to the company's Memorandum have paid the value of the shares they agreed to take.
Under Section 10A of the Companies Act, 2013, a company incorporated after the commencement of the Companies (Amendment) Act, 2019 and having share capital cannot commence business or exercise borrowing powers unless the prescribed declaration is filed and the company's registered office verification requirement has also been complied with. The declaration is required within 180 days from the date of incorporation.
For startups and newly incorporated companies in Delhi, Noida, Gurugram, Ghaziabad, Faridabad and other parts of India, INC-20A should therefore be treated as a priority compliance rather than something to address after the business has already started operating.
What Is INC-20A?
INC-20A is the MCA webform used to file the declaration of commencement of business under Section 10A(1)(a) of the Companies Act, 2013.
The current MCA Instruction Kit states that a company having share capital is required to file the declaration with the Registrar and that the declaration is to be filed by a director within 180 days of the company's incorporation.
The declaration essentially confirms that:
Every subscriber to the Memorandum has paid the value of the shares agreed to be taken by them.
This is an important distinction.
INC-20A is not simply a declaration that:
"The company has started earning revenue."
It is connected with the company's subscribed share capital and the payment of that capital by the subscribers.
Which Companies Need to File INC-20A?
The requirement applies to a company:
-
Incorporated after the commencement of the relevant amendment
-
Having share capital
-
Falling within Section 10A
The MCA's current Instruction Kit specifically states that INC-20A can be filed only by a company having share capital.
Therefore, a newly incorporated company should first identify its legal structure and whether it has share capital before assuming that INC-20A applies.
For example, newly incorporated:
-
Private limited companies
-
Public companies
with share capital generally need to examine the requirement.
The exact applicability should always be checked against the company's incorporation details and current statutory requirements.
Why Was Section 10A Introduced?
Section 10A was introduced to ensure that companies with share capital complete an important post-incorporation step before commencing business or exercising borrowing powers.
The provision requires a director to declare that subscribers have paid the agreed value of their shares.
It also links commencement of business and borrowing powers with verification of the registered office.
The practical idea is simple:
Incorporation → subscriber capital paid → registered office verified → commencement declaration → business/borrowing compliance
This makes INC-20A part of the company's initial legal-compliance framework.
What Is the INC-20A Due Date?
The declaration must be filed within:
180 days from the date of incorporation.
The MCA Instruction Kit expressly confirms the 180-day period.
Example
Suppose a company is incorporated on:
1 April 2026
Its 180-day compliance period should be calculated from the date of incorporation.
The company should not wait until the last day.
A better internal approach is to start preparing the filing once:
-
The company's bank account is operational
-
Subscriber money has been received
-
The registered office requirement is complete
-
Supporting records are available
What Does the Declaration Actually Confirm?
The declaration confirms that the subscribers to the Memorandum have paid the value of the shares they agreed to take.
For example, suppose:
Subscriber A: 50,000 shares × ₹10 = ₹5,00,000
Subscriber B: 30,000 shares × ₹10 = ₹3,00,000
Subscriber C: 20,000 shares × ₹10 = ₹2,00,000
Total subscribed amount:
₹10,00,000
If the subscribers have paid the required amounts, the company can prepare the relevant evidence for INC-20A.
The company's bank records should support the receipt of the subscription money.
What Is Proof of Subscription Money?
One of the most important practical documents for INC-20A is evidence showing receipt of the subscription money from the subscribers.
The MCA form provides for an attachment relating to proof of payment for the value of shares. The current form framework therefore requires the company to maintain appropriate evidence supporting the declaration.
A company should maintain records such as:
-
Bank statement
-
UTR/payment details
-
Subscriber-wise payment records
-
Share subscription details
-
Relevant incorporation documents
-
Other supporting evidence required for the filing
The evidence should make it possible to connect the money received with the relevant subscriber and shares.
Example: Delhi Startup
Suppose three founders incorporate a private limited company in Delhi.
Their subscribed capital is:
₹6 lakh
After incorporation, the founders transfer the subscription amounts into the company's bank account.
Before filing INC-20A, the company should maintain:
-
Company's bank statement
-
Subscriber names
-
Amount paid by each subscriber
-
Payment dates
-
Transaction references
-
Incorporation documents
The compliance team can then use the records to support the declaration.
Does the Company Need a Bank Account?
In practical terms, the company needs an appropriate banking arrangement to demonstrate receipt of subscription money and support the filing.
The purpose is not merely to have a bank account.
The important point is that the company should be able to demonstrate that the subscribers actually paid the value of the shares they agreed to take.
A bank statement showing the relevant credit entries is therefore an important supporting record.
Can Subscription Money Be Paid in Cash?
Companies should be extremely careful about how subscriber payments are received and documented.
The objective of INC-20A is to establish that the subscriber has actually paid the value of the shares agreed to be taken.
A clear banking trail is therefore preferable for compliance documentation.
For any proposed payment method, the company should also consider applicable tax, accounting, banking and other legal requirements.
What If Only Part of the Subscription Money Has Been Paid?
This is an important situation.
Suppose the subscriber agreed to take shares worth:
₹10 lakh
but has paid only:
₹6 lakh
The company should not simply assume that INC-20A can be filed declaring that the full agreed amount has been paid.
The declaration under Section 10A relates to payment of the value of the shares agreed to be taken by subscribers.
The company should therefore review its subscription terms and actual receipt of funds before making the declaration.
INC-20A and Registered Office Verification
Section 10A contains two connected conditions.
The company must:
1. File the commencement declaration
and
2. Have filed verification of its registered office under Section 12(2).
This means INC-20A should not be looked at in isolation.
The MCA's current INC-20A Instruction Kit specifically reminds filers to ensure that the registered office address has been updated through INC-22 or SPICe+ Part B, as applicable.
INC-20A and INC-22: What Is the Difference?
These forms address different requirements.
INC-20A
Deals with:
Declaration of commencement of business
INC-22
Deals with:
Verification of the company's registered office
A company may therefore have both forms in its post-incorporation compliance workflow, depending on what was already completed during incorporation.
The current INC-20A Instruction Kit specifically states that the registered office address should be updated through INC-22 or SPICe+ Part B.
Example: Noida Company
A Noida private limited company was incorporated with a registered office address already provided through the incorporation process.
The company subsequently receives its subscriber capital.
Before preparing INC-20A, the compliance team should verify that the company's registered office information is properly reflected with MCA.
If the registered-office verification requirement has not been completed as required, the company should address that issue as part of the post-incorporation compliance process.
What Happens If INC-20A Is Not Filed?
Section 10A provides specific consequences for non-compliance.
If the company defaults in complying with the requirements:
Company: ₹50,000 penalty
Officer in default: ₹1,000 for each day during which the default continues, subject to a maximum of ₹1,00,000.
This is why INC-20A should not be treated as an optional administrative form.
The MCA has also issued adjudication orders involving penalties for Section 10A defaults, demonstrating that non-compliance can result in actual regulatory action.
Can a Company Start Business Before Filing INC-20A?
Section 10A says that a company covered by the provision shall not commence any business or exercise borrowing powers unless the prescribed conditions are fulfilled.
Therefore, a newly incorporated company should not simply assume:
"The Certificate of Incorporation has been received, so everything is ready."
The post-incorporation compliance stage still matters.
The company should complete the applicable commencement requirements before proceeding with activities restricted by Section 10A.
Can the Company Exercise Borrowing Powers Before INC-20A?
Section 10A expressly refers to both:
-
Commencing business
-
Exercising borrowing powers
Therefore, the issue is not limited to whether the company has started selling products or providing services.
A company planning to obtain financing should also consider its INC-20A status.
Example
A newly incorporated company approaches a bank for a business loan.
The bank's due-diligence team checks the company's MCA records and discovers that the commencement declaration has not been filed.
The company may face additional compliance questions before proceeding with its financing.
Completing the relevant post-incorporation filings early can help avoid such situations.
What Happens After 180 Days?
Failure to file within 180 days creates a statutory default.
Section 10A provides the penalty consequences described above.
In addition, where the declaration has not been filed within 180 days and the Registrar has reasonable cause to believe that the company is not carrying on business or operations, the Registrar may initiate action for removal of the company's name from the register under Chapter XVIII.
This does not mean that every company automatically gets struck off immediately after 180 days.
The statutory language refers to the Registrar having reasonable cause to believe that the company is not carrying on business or operations.
However, it demonstrates why prolonged non-compliance should not be ignored.
INC-20A Penalty Example
Suppose a company delays filing for a prolonged period.
Section 10A provides:
Company penalty: ₹50,000
For an officer in default:
₹1,000 per day
subject to:
Maximum ₹1,00,000
The actual consequences should be considered based on the period of default and the applicable adjudication process.
Companies should therefore avoid treating the 180-day period as a flexible internal target.
What Documents Are Required for INC-20A?
The exact attachment requirements depend on the company's circumstances and the current MCA form.
The most important supporting evidence generally includes:
-
Proof of payment of subscription money
-
Company bank statement showing relevant credits
-
Subscriber-wise payment details
-
Incorporation documents
-
Registered office details
-
Relevant regulatory approval, where applicable
-
Other documents required by the MCA form
The MCA Instruction Kit specifically states that mandatory supporting documents must be attached in the specified format.
What If the Company Is Regulated by a Sectoral Regulator?
Some companies operate in regulated sectors.
For example, certain businesses may require approvals or registrations from:
-
RBI
-
IRDAI
-
SEBI
-
Other sector-specific regulators
The INC-20A form can require relevant regulatory information where the company's affairs are regulated by a sectoral regulator.
The MCA Instruction Kit specifically includes checks relating to companies regulated by sectoral regulators.
Therefore, a regulated company should keep its regulatory documentation ready.
INC-20A for an NBFC
A company operating as an NBFC has additional regulatory considerations.
Where the company is regulated by RBI, the relevant regulatory information and documentation may need to be provided as required by the form.
The company should not treat INC-20A as a standalone filing without considering its sector-specific compliance.
Who Can File INC-20A?
The MCA Instruction Kit states that the declaration is to be filed by a director.
The form also has technical requirements concerning:
-
DIN
-
PAN
-
DSC
-
MCA user registration
-
Company association
-
Professional certification where applicable
The signing director's DIN should be valid and should not be flagged for disqualification.
Professional Certification
The filing may require certification by a practicing professional as prescribed by the form.
The MCA Instruction Kit specifically requires the practicing professional signing the form to have a valid membership number.
The company should therefore coordinate with its:
-
Chartered Accountant
-
Company Secretary
-
Other applicable professional
well before the filing deadline.
MCA Technical Checks Before Filing
The current MCA Instruction Kit identifies several technical checks.
The company should ensure:
-
Company is registered with MCA
-
Company has a valid CIN
-
Company status is Active
-
Filing user is properly registered
-
Business user is associated or authorised
-
Signatory has valid DIN/PAN/membership details
-
DSC is registered and valid
-
No conflicting INC-20A is pending
-
Registered office details are properly updated
-
Signing director is eligible to sign
-
Any pending DIR-12 issue is addressed where relevant
These checks can prevent technical rejection or resubmission.
Example: Gurugram Startup With a Filing Problem
Suppose a Gurugram startup has received its Certificate of Incorporation.
The founders deposit the subscription money into the company bank account.
However, when the company prepares INC-20A, it discovers that:
-
One director's DIN is flagged
-
Registered-office information is not properly updated
-
One subscriber has not paid the full agreed amount
The company should resolve these underlying issues before making a declaration that the statutory requirements have been satisfied.
This is why INC-20A preparation should involve verification rather than simply uploading a bank statement.
Common Mistake: Filing Without Verifying Subscriber Payments
The declaration is not simply a procedural statement.
It confirms a specific fact:
The subscribers have paid the value of the shares agreed to be taken.
Therefore, the company should reconcile:
-
Subscriber name
-
Shares subscribed
-
Amount payable
-
Amount received
-
Date received
-
Bank transaction
before filing.
Common Mistake: Confusing Authorised Capital With Subscription Money
A company's authorised share capital is not necessarily the same as the amount subscribed by the initial shareholders.
For example:
Authorised capital: ₹10 lakh
Subscribed capital: ₹2 lakh
The INC-20A declaration concerns the value of shares agreed to be taken by the subscribers, not the entire authorised capital.
This distinction is important when preparing the supporting reconciliation.
Common Mistake: Ignoring the Registered Office Requirement
A company may have received its Certificate of Incorporation and assume that its registered office compliance is automatically complete.
However, Section 10A expressly links commencement with the registered-office verification requirement under Section 12(2).
The company should therefore verify its MCA records before filing.
Common Mistake: Waiting Until Day 180
A company technically has 180 days, but waiting until the final days can create avoidable problems.
Potential issues include:
-
Bank account delays
-
Missing subscriber payment
-
Incorrect bank narration
-
Registered office mismatch
-
DSC problems
-
Director-related issues
-
Professional availability
-
MCA technical errors
-
Resubmission requirements
A better approach is to begin preparation soon after incorporation.
Common Mistake: Treating INC-20A as an Annual Filing
INC-20A is not an annual ROC return.
It is a post-incorporation declaration linked to commencement of business.
Once the applicable declaration is filed, the company then moves into its continuing compliance cycle, which can include:
-
AOC-4
-
MGT-7/MGT-7A
-
DIR-3 KYC
-
DPT-3
-
MSME Form-1 where applicable
-
Other event-based MCA forms
The compliance calendar should therefore distinguish between one-time post-incorporation filings and recurring annual/half-yearly filings.
INC-20A and First-Year ROC Compliance
New companies should build a compliance calendar immediately after incorporation.
A simplified timeline can look like:
At Incorporation
-
Certificate of Incorporation
-
PAN/TAN
-
Bank account
-
Share subscription process
Within the Applicable Period
-
Subscriber capital receipt
-
Registered-office verification
-
INC-20A
During the Year
-
Statutory registers
-
Accounting records
-
GST/tax compliance where applicable
-
Payroll compliance where applicable
After Financial Year-End
-
Financial statements
-
Auditor-related compliance
-
AOC-4
-
Annual return
-
Other applicable ROC filings
This prevents the common mistake of thinking that incorporation itself completes all company compliance.
Practical INC-20A Checklist for Startups
Before filing, a startup should verify:
-
Certificate of Incorporation available
-
CIN active
-
Company has share capital
-
Subscriber details verified
-
Subscription amount calculated
-
Full required subscription money received
-
Bank statement available
-
Subscriber-wise payments reconciled
-
Registered office requirement completed
-
INC-22/SPICe+ Part B position verified
-
Director's DIN valid
-
Director is eligible to sign
-
DSC valid and registered
-
Sectoral approval checked where applicable
-
Professional certification arranged where required
-
INC-20A prepared
-
Filing reviewed
-
MCA acknowledgement preserved
Example: Private Limited Company in Delhi
Consider a Delhi private limited company incorporated with two shareholders.
The shareholders subscribe:
Shareholder 1: ₹5 lakh
Shareholder 2: ₹5 lakh
Total subscribed capital:
₹10 lakh
The company receives both amounts in its bank account.
The compliance team should then:
-
Reconcile both payments
-
Verify the bank credits
-
Confirm registered-office compliance
-
Prepare INC-20A
-
Arrange the required signing/certification
-
File within 180 days
-
Preserve the acknowledgement
The company can then continue with its regular compliance framework.
What Should the Company Do After Filing?
The company should not simply save the MCA SRN and forget about the filing.
It should preserve:
-
Filed INC-20A
-
SRN
-
Challan/payment receipt
-
Approval/acknowledgement
-
Bank statement
-
Subscriber payment reconciliation
-
Supporting documents
These records can later be useful during:
-
Audit
-
Investment due diligence
-
Bank financing
-
Corporate restructuring
-
Share transfers
-
ROC inspections
-
Legal due diligence
INC-20A and Investors
Investors conducting due diligence on a young company may review its statutory compliance history.
A company with properly maintained incorporation and commencement records can more easily demonstrate that its post-incorporation obligations were addressed.
For a startup preparing for:
-
Angel investment
-
Venture capital
-
Strategic investment
-
Bank finance
maintaining MCA compliance records from day one can simplify future documentation.
INC-20A and Bank Loans
Because Section 10A specifically restricts the exercise of borrowing powers until the prescribed requirements are fulfilled, a startup planning debt financing should pay particular attention to INC-20A.
For example, a company incorporated in Noida may plan to obtain:
₹25 lakh working capital facility
within its first few months.
The management should include the commencement declaration in its pre-financing compliance checklist.
A Practical Post-Incorporation Workflow
For a newly incorporated company, a useful workflow is:
1. Receive Certificate of Incorporation
↓
2. Open company bank account
↓
3. Receive subscriber capital
↓
4. Verify registered office compliance
↓
5. Prepare INC-20A
↓
6. Director signs declaration
↓
7. Complete professional certification where required
↓
8. File with MCA
↓
9. Preserve acknowledgement
↓
10. Move into recurring ROC compliance calendar
This simple workflow can prevent several early-stage compliance gaps.
Final Takeaway
INC-20A is a critical post-incorporation MCA compliance for applicable companies having share capital.
Under Section 10A, the company must file a director's declaration within 180 days of incorporation confirming that subscribers have paid the value of the shares agreed to be taken. The company must also have complied with the applicable registered-office verification requirement.
The consequences of non-compliance can include:
-
₹50,000 penalty on the company
-
₹1,000 per day on the officer in default, capped at ₹1 lakh
-
Potential action for removal of the company's name where the statutory conditions under Section 10A(3) are met.
The practical compliance sequence is:
Incorporation → Subscriber payment → Registered-office verification → INC-20A → Continuing ROC compliance
For startups and companies in Delhi, Noida, Gurugram, Ghaziabad, Faridabad and across India, completing INC-20A early can help establish a clean post-incorporation compliance record and avoid unnecessary issues when the company begins operations, seeks financing or enters its first annual compliance cycle.
Need Help With INC-20A Filing?
If your newly incorporated company needs assistance with INC-20A, post-incorporation compliance, MCA filings or complete ROC compliance, FilingSuvidha can help coordinate the applicable process.
Website: FilingSuvidha
Phone: +91-9625995981
Email: info@filingsuvidha.com
Our focus is on transparent pricing and on-time delivery.
Disclaimer
This article is intended for general informational purposes only and should not be treated as legal, company-secretarial, accounting or professional advice. INC-20A applicability and filing requirements depend on the company's incorporation date, share capital, subscriber payments, registered-office compliance and the laws and MCA requirements applicable at the relevant time. Companies should verify the latest MCA forms, rules, notifications and statutory provisions before filing.