Section 10A declaration in Form INC-20A within 180 days of incorporation — subscription money proof, registered-office verification, Rule 23A professional certification, ₹50,000 / ₹1,000-per-day penalties, and ROC strike-off risk if you never file.
By Kanoons Editorial Team · 11 min read · Last verified 2026-10-06
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Summary
Form INC-20A is the director’s commencement-of-business declaration under section 10A of the Companies Act, 2013. A company with share capital incorporated on or after 2 November 2018 must not commence business or borrow until a director files the form within 180 days of incorporation, confirming that every subscriber has paid for their shares and that registered-office verification under section 12(2) is in place. Miss the window and you face ₹50,000 on the company, ₹1,000/day on officers (cap ₹1 lakh), MCA late fees, and — if you never file — possible strike-off. Verified against section 10A, Rule 23A and MCA adjudication practice notes on 6 October 2026.
- Applies to share-capital companies incorporated on/after 2 Nov 2018.
- File within 180 days of the Certificate of Incorporation date (COVID 360-day relief was time-boxed).
- Prerequisites: subscription money in the company bank account + section 12(2) office verification + professional verification under Rule 23A.
- Until filed: no legal commencement and no borrowing powers under section 10A(1).
- Service path: INC-20A Filing.
Legal framework
| Instrument | What it does |
|---|---|
| Section 10A, Companies Act, 2013 | Creates the commencement bar, 180-day declaration, penalties, and strike-off trigger |
| Rule 23A, Companies (Incorporation) Rules, 2014 | Prescribes Form INC-20A and practising-professional verification |
| Companies (Registration Offices and Fees) Rules, 2014 | Portal filing fees and additional fees for delay |
| MCA General Circular 11/2020 | Temporary extra 180 days (total 360) for incorporations 1 Apr 2019 – 30 Sep 2020 only |
Do not tell a 2025 or 2026 incorporation that they still have 360 days — that circular’s cohort has closed.
What the declaration actually asserts
A director declares, in substance, that:
1. Every subscriber to the memorandum has paid the value of shares agreed to be taken on the date of the declaration, and 2. The company has complied with the registered-office verification under section 12(2).
Rule 23A adds that the contents are verified by a company secretary, chartered accountant or cost accountant in practice. If the company’s objects require sectoral registration or approval (RBI, SEBI, IRDAI, etc.), that approval must be obtained and attached.
Practical filing sequence
1. Open the company current account (bank will usually ask for COI, MOA/AOA, PAN, board resolution). 2. Receive subscription money from every subscriber — amounts and names must match the incorporation subscription schedule. 3. Confirm INC-22 / section 12(2) registered-office filing is complete (often done at incorporation via SPICe+, but verify the MCA record). 4. Pass a short board note recording receipt of subscription. 5. Engage a practising professional to verify Form INC-20A. 6. File on MCA21 within 180 days of incorporation; download the SRN acknowledgement.
Mid-article CTA: File INC-20A before day 180 → Cross-sell: Private Limited Company, ROC Annual Compliance.
What you must not do before filing
Section 10A(1) is explicit: until the declaration (and the office-verification limb) are satisfied, the company shall not commence any business or exercise any borrowing powers. In practice that means treat the following as blocked until SRN is in hand:
- Operational trading in the company’s name
- Drawing term loans / working-capital facilities as the company
- Issuing tax invoices as a going concern (banks and counterparties increasingly ask for INC-20A status in diligence)
Receiving subscription capital into the bank account is a prerequisite, not “commencement.” Starting vendor contracts, payroll or borrowing first and filing INC-20A later is exactly the pattern MCA adjudication orders have flagged.
If you miss the 180-day deadline
1. Portal additional fees
Once you do file late, MCA charges additional fees as a multiple of the normal fee under the Registration Offices and Fees Rules (commonly summarised as 2× / 4× / 6× / 10× / 12× by delay band — confirm the live fee table at checkout).
2. Section 10A(2) penalty
Independent of portal fees:
- Company: ₹50,000
- Every officer in default: ₹1,000 per day of continuing default, maximum ₹1,00,000
Adjudication orders on mca.gov.in show ROC applying these figures even for multi-week delays after commencement or after the 180-day mark.
3. Strike-off under section 10A(3)
If no declaration is filed within 180 days and the Registrar has reasonable cause to believe the company is not carrying on business or operations, ROC may initiate removal of the name under Chapter XVIII — without prejudice to the monetary penalty. Ghost companies that never banked subscription money are the classic target; do not assume “we will file when we start trading next year” is safe.
Worked timeline
| Incorporation date | Day-180 deadline | Action |
|---|---|---|
| 1 July 2026 | 28 December 2026 | Open bank account in July–August; file INC-20A as soon as subscription clears — do not wait for day 179 |
| 15 January 2026 | 14 July 2026 | Same discipline; monsoon bank delays are not a defence |
Count calendar days from the COI date printed on the certificate, not from the SPICe+ SRN date you remember.
Checklist
- Every subscriber’s payment reflected on company bank statement
- Amounts match memorandum subscription
- Registered-office proof already on MCA record
- Sectoral approval PDF attached if objects require it
- Practising professional DSC / certification ready
- SRN PDF archived with incorporation pack
Related reading on this site
- Register a Private Limited Company
- AOC-4 and MGT-7
- Understanding ROC compliance
- Company strike-off (planned cluster)
Primary sources
- Companies Act, 2013 — section 10A (declaration, penalty, strike-off trigger)
- Companies (Incorporation) Rules, 2014 — Rule 23A (Form INC-20A; professional verification; sectoral approvals)
- MCA General Circular No. 11/2020 (temporary 360-day window for specified 2019–2020 incorporations)
- mca.gov.in — e-form INC-20A / adjudication orders under section 10A
- Companies (Registration Offices and Fees) Rules, 2014 — additional fees for delay
Disclaimer
General information only — not legal or company-secretarial advice. Kanoons is not a law firm. Section 10A outcomes turn on incorporation date, capital structure and facts of commencement; confirm against the live Act, Rules and MCA portal before acting. See our Disclaimer.
Frequently asked questions
Who must file INC-20A?
Every company having a share capital and incorporated after the commencement of the Companies (Amendment) Ordinance, 2018 (effectively on or after 2 November 2018) must file a director’s declaration in Form INC-20A before commencing business or exercising borrowing powers. Companies without share capital are outside section 10A(1)(a).
What is the filing deadline?
Section 10A(1)(a) requires the declaration within 180 days of the date of incorporation. MCA General Circular No. 11/2020 temporarily extended the window to 360 days for companies incorporated between 1 April 2019 and 30 September 2020; that COVID relief does not rewrite the default 180-day rule for companies incorporated outside that window.
What must be true before you file?
Every subscriber to the memorandum must have paid the value of the shares agreed to be taken, and the company must have filed the registered-office verification required under section 12(2). Rule 23A also requires the form contents to be verified by a practising CS, CA or cost accountant. Sectoral approvals (RBI, SEBI, etc.) must be attached where objects require them.
What is the penalty for default?
Section 10A(2): the company is liable to a penalty of ₹50,000, and every officer in default to ₹1,000 for each day of continuing default, capped at ₹1,00,000 per officer. Late filing on the MCA portal also attracts additional fees under the Companies (Registration Offices and Fees) Rules. These are separate exposures.
Can ROC strike off a company that never files INC-20A?
Yes. Section 10A(3) empowers the Registrar, where no declaration is filed within 180 days and there is reasonable cause to believe the company is not carrying on business or operations, to initiate removal of the name under Chapter XVIII — without prejudice to the monetary penalty under section 10A(2).