Commencement of Business Certificate (INC-20A)

It is a declaration a newly incorporated company must file with the Registrar of Companies confirming that the money its founders promised to invest as share capital has actually been paid into the company's bank account. Until this declaration is filed, the company cannot legally start business, sign binding contracts in the ordinary course, or borrow money.

Every company incorporated on or after 2 November 2018 that has a share capital — this covers Private Limited Companies, Public Limited Companies, One Person Companies, Section 8 companies with share capital, and Producer Companies. Companies incorporated before that date, and companies without share capital, are outside the scope of Section 10A.

Within 180 days from the date of incorporation as shown on the Certificate of Incorporation. This is a hard statutory deadline under Section 10A of the Companies Act 2013 — there is no automatic extension, though the government has, on rare occasions, granted a general relaxation during exceptional circumstances such as system outages.

The company becomes liable to a penalty of ₹50,000. Every officer in default is separately liable to a penalty of ₹1,000 for each day the default continues, subject to a maximum of ₹1,00,000 per officer. Beyond the monetary penalty, the company legally cannot commence business or borrow money until the declaration is filed, and prolonged non-compliance exposes the company to the risk of the Registrar initiating strike-off proceedings.

Yes, in the worst case. If the Registrar has reasonable cause to believe, after the 180-day period, that the company is not carrying on any business or that the subscribed capital has still not been brought in, the Registrar may initiate proceedings to remove the company's name from the register of companies under Section 248 of the Companies Act 2013.

The core requirement is proof that subscriber capital has been paid into the company's bank account — typically the bank statement showing each subscriber's credit matching their subscription in the Memorandum of Association. For companies requiring a sectoral regulatory approval before commencing business (such as an NBFC or insurance intermediary), proof of that approval must also be attached. The form itself is certified by a practising CA, CS, or Cost Accountant and digitally signed by a director.

A practising Chartered Accountant, Company Secretary, or Cost Accountant must certify the declaration, confirming that they have verified the paid-up capital has genuinely been received into the company's bank account. This professional certification is a mandatory part of the e-form.

No specific minimum threshold applies — since 2015 there is no statutory minimum paid-up capital requirement for incorporation. What matters for INC-20A is that whatever capital each subscriber agreed to in the Memorandum of Association has actually and fully been paid into the company's bank account. Partial payment by a subscriber does not satisfy the requirement for that subscriber's shares.

Legally, a company should not commence business or exercise borrowing powers until INC-20A is filed and the declaration confirms paid-up capital has been received. Directors who cause the company to sign contracts or incur obligations in this window before filing carry heightened compliance and personal-exposure risk. The safer and correct approach is to treat INC-20A as a precondition to any commercial activity, not a formality to complete alongside it.

No. INC-20A is a one-time declaration filed once, shortly after incorporation, confirming commencement of business. It is not part of the recurring annual compliance cycle. Once approved, the company moves on to its regular annual obligations — statutory audit, AOC-4, MGT-7, ITR-6, DIR-3 KYC, and so on.

The MCA charges a filing fee for INC-20A based on the company's authorised share capital, on the same fee schedule that applies to other MCA e-forms. If filed after the 180-day deadline, an additional fee applies on top of the normal filing fee, calculated per day of delay under the MCA's additional fee framework. PNPC computes the exact fee applicable to your specific capital slab and filing date before submission.

They are separate obligations that happen to fall in a similar early window. ADT-1 — the notice of appointment of the company's first statutory auditor — must be filed within 30 days of incorporation, following the auditor's appointment at the first Board meeting. INC-20A has a longer 180-day window and depends on subscriber capital actually being paid in. PNPC tracks both on the same post-incorporation compliance calendar so neither is missed while attention is on the other.

If a subscriber genuinely cannot bring in their capital within the 180-day window, the company faces a real compliance problem — INC-20A cannot be filed truthfully without the capital being received, and the 180-day statutory clock does not pause for a subscriber's personal delay. Options in this situation include the subscriber arranging funds urgently, another party stepping in to subscribe to those shares through a formal amendment process, or the company accepting the penalty exposure while resolving the capital issue. This scenario should be flagged to your CA the moment it looks likely, not after the deadline has passed.

No. INC-20A requires proof that subscriber capital has been credited to the company's own bank account. A company cannot file the declaration until its bank account is open and the capital has actually landed in it. This makes bank account opening the practical first bottleneck in the 180-day timeline, which is why PNPC prepares the account-opening documentation immediately after incorporation rather than waiting for the client to initiate it.

Yes. When a person resident outside India subscribes to shares of an Indian company, that inflow constitutes Foreign Direct Investment (FDI) under FEMA, and separately from INC-20A, the company must report the share allotment to the RBI by filing Form FC-GPR on the FIRMS portal within 30 days of allotment. INC-20A and FC-GPR are distinct filings with different timelines and different authorities, but both stem from the same subscriber capital event, so PNPC tracks them together for companies with foreign subscribers.

The Registrar may raise a query if there is a mismatch — for instance, the bank credit does not match the exact subscription amount for a subscriber, the bank statement is unclear, or a required attachment (such as a sectoral regulatory approval) is missing. The company must respond within the time allowed in the query, typically by resubmitting the form with corrected information or additional documents. Repeated defective resubmissions can push the filing close to or past the 180-day deadline, so getting the first submission right matters.

Practically speaking, no — capital contributions towards share subscription should be routed through banking channels so that the payment is verifiable on a bank statement, which is the primary evidence required for INC-20A certification. Cash contributions are difficult to evidence in a way that satisfies the certifying professional and the Registrar, and large cash transactions can separately attract scrutiny under other provisions of law. PNPC advises all subscribers to route their capital through a bank transfer, cheque, or demand draft — never cash — specifically to keep the INC-20A trail clean.

Yes. PNPC regularly assists companies that engage us after the deadline has already passed. The process starts with confirming exactly how late the filing is, computing the applicable additional MCA fee and the officer-level penalty exposure under Section 10A, verifying that subscriber capital has in fact been received, and then filing the declaration without further delay. The exposure only grows the longer the company waits, so we treat these engagements as urgent.

Yes. SPICe+ is simply the integrated incorporation form used to obtain the Certificate of Incorporation, PAN, TAN, and other initial registrations in a single filing. It does not itself satisfy the Section 10A requirement — INC-20A is a distinct, separate filing that must be made after incorporation, once subscriber capital has actually been paid in.

The company's bank statement showing the credit entries, clearly reflecting each subscriber's name (or a traceable payment reference) and an amount matching their subscription in the Memorandum of Association exactly. Where a payment is made by cheque or demand draft, the cleared instrument reference on the statement is generally sufficient; where made by electronic transfer, the transaction reference and remitter name should be visible.

The DSC used at incorporation can generally be reused for INC-20A, provided it is still valid and belongs to a person authorised to sign on the company's behalf, such as a director. DSCs have a validity period (commonly one to three years depending on the class and issuance) and can lapse between incorporation and the INC-20A filing if there has been a long gap. PNPC checks DSC validity before initiating any MCA filing.

Yes. INC-20A is not conditional on the company having actually transacted business — it is a declaration that the company is now legally permitted to commence business, based on subscriber capital having been received. A company with genuinely no activity in its early months still needs to bring in the subscribed capital and file the declaration within 180 days; the filing obligation does not pause simply because the company has not yet started operating commercially.

Incorporation is the legal act of the company coming into existence as a separate legal person, evidenced by the Certificate of Incorporation. Commencement of business is a distinct, later legal threshold — the point at which the company is authorised to actually exercise its corporate powers, such as entering into contracts in the ordinary course and exercising borrowing powers. Since the introduction of Section 10A in 2018, that threshold is formally marked by the successful filing of INC-20A.

Every officer in default — which typically includes directors responsible for compliance — is personally liable to a penalty of ₹1,000 for each day of continuing default, capped at ₹1,00,000 per officer, in addition to the ₹50,000 penalty on the company itself. Directors who cause the company to conduct business or exercise borrowing powers before the declaration is filed also carry a heightened compliance risk under Section 10A.

Once the bank statement clearly shows the subscriber capital credited and matching the MoA subscription list, and any required regulatory approval (where applicable) is available, PNPC typically completes verification, professional certification, and MCA e-filing within a few working days. The binding constraint before that point is almost always how quickly the bank account was opened and capital was transferred — not the filing process itself.

It can add complexity but does not remove the underlying obligation. Any change in registered office (Form INC-22) or authorised capital (Form SH-7) filed in the interim should be reflected correctly and consistently before INC-20A is filed, since MCA cross-checks company master data across filings. PNPC reviews the company's current MCA master data before filing INC-20A to ensure consistency across all recent filings.

For clients who engage PNPC for incorporation, INC-20A tracking and filing is built into the standard post-incorporation engagement — logged on Day 1 of the Certificate of Incorporation and initiated proactively as capital comes in. For clients who incorporated elsewhere (through another firm or an online portal) and later engage PNPC specifically for INC-20A, it is offered as a standalone filing engagement with its own fixed, agreed fee.

An unfiled or overdue INC-20A is a standard item that investor due diligence teams check, because it directly indicates whether the company has legally commenced business and whether subscriber capital was actually received as represented in the cap table. A gap here can delay a funding round while it is resolved, and depending on how overdue the filing is, it may also require addressing accumulated penalty exposure before the round closes.

Yes. A wholly-owned Indian subsidiary of a foreign parent is incorporated under the Companies Act 2013 like any other Indian company with share capital, and Section 10A applies in the same way — the parent company's capital contribution must be paid into the Indian subsidiary's bank account and evidenced before INC-20A is filed within 180 days. The FDI angle adds the parallel FC-GPR reporting obligation to RBI, but does not change the INC-20A requirement itself.

INC-20A is a short filing on paper, but it requires professional certification by law, careful matching of bank credits against MoA subscription amounts, correct handling of any sectoral regulatory attachment, and — most importantly — proactive tracking of a 180-day deadline that portals routinely leave to the founder to remember. PNPC logs the deadline the day the Certificate of Incorporation is issued, prepares the bank account documentation in advance, verifies the capital trail before certifying, and files well ahead of the cut-off rather than in the final days.

PNPC quotes a fixed, agreed professional fee for INC-20A — whether as part of a full incorporation engagement or as a standalone filing for a company incorporated elsewhere. The fee is confirmed in writing before work begins, and for overdue filings, we separately quantify the additional MCA fee and any penalty exposure so the client sees the complete cost picture upfront.

The Memorandum of Association lists every original subscriber to the company's shares and the value each agreed to pay. This subscription list is the reference point against which the bank statement is checked — INC-20A essentially proves that the promises made in the MoA at incorporation have actually been honoured in cash, in the company's own bank account.

Once INC-20A is approved by the Registrar, it is not designed to be routinely refiled or revised. If a genuine error is discovered after approval — for instance, in the underlying capital records — the appropriate course of action depends on the nature of the error and may involve professional advice on rectification through the correct MCA mechanism rather than a simple resubmission. This is a low-frequency, fact-specific scenario that should be discussed directly with your CA rather than assumed to have a standard fix.