Form INC-20A: Why Not Filing This One Form Can Get Your Company Struck Off
Last updated: 13 April 2026
MCA has imposed penalties of ₹2,50,000 on companies for failing to file a single form — Form INC-20A, the Declaration of Commencement of Business. Introduced via Section 10A of the Companies Act 2013 (inserted by the Companies (Amendment) Ordinance, 2018), this form applies to every company with share capital incorporated on or after 2 November 2018. The filing deadline is 180 days from incorporation. Miss it, and the consequences are severe: your company cannot legally commence business operations, all transactions entered into may be void, and the Registrar can initiate strike-off proceedings under Section 248.
Quick Summary
Form: INC-20A (Declaration of Commencement of Business)
Section: 10A of the Companies Act 2013
Applies to: Companies with share capital incorporated on or after 2 November 2018
Deadline: Within 180 days of incorporation
Penalty: ₹50,000 on the company + ₹1,000/day per officer (max ₹1,00,000)
Risk: Strike-off under Section 248 if not filed
What Is Form INC-20A?
Form INC-20A is a declaration filed with the Registrar of Companies confirming that every subscriber to the Memorandum of Association has paid the value of shares agreed to be taken by them on the date of making the declaration. Under Section 10A, a company having share capital shall not commence business or exercise any borrowing powers unless it files this declaration within 180 days of incorporation. The declaration must be verified by a Chartered Accountant or a Company Secretary in practice.
This provision was introduced to address the problem of shell companies — entities incorporated but never capitalised or operationalised, which were being used for fraudulent purposes.
Who Must File Form INC-20A?
Filing is mandatory for every company with share capital incorporated on or after 2 November 2018. This includes private limited companies, public limited companies, one person companies, and Section 8 companies that have share capital. Companies incorporated before this date are not required to file INC-20A.
The filing requirement cannot be waived, even if the company has already commenced business operations. A company that starts transacting business without filing INC-20A is operating in violation of Section 10A — and all such transactions may be challenged as void.
The 180-Day Deadline and What Happens If You Miss It
Day 0 — Company incorporated, Certificate of Incorporation issued
Day 1-180 — Subscribers pay full share value; file INC-20A on MCA V3 portal
Day 181+ — Penalty kicks in: ₹50,000 on company + ₹1,000/day on each officer
Continued default — ROC may initiate strike-off proceedings under Section 248
Penalty Structure Under Section 10A
| Defaulter | Initial Penalty | Continuing Penalty | Maximum |
|---|---|---|---|
| Company | ₹50,000 | — | ₹50,000 |
| Every Officer in Default | — | ₹1,000 per day | ₹1,00,000 |
The Strike-Off Risk: Section 248
The most serious consequence of non-filing is not the monetary penalty — it is the risk of strike-off. Under Section 248, the Registrar has the power to remove the name of a company from the register if the company has failed to commence business within one year of incorporation and has not filed INC-20A. The Registrar must send a notice to the company and allow a reasonable opportunity to be heard before passing the strike-off order.
A struck-off company cannot carry on business, cannot access its bank accounts, cannot enter into contracts, and its directors may face disqualification under Section 164(2). Restoration requires an application to NCLT under Section 252, which involves legal costs, tribunal fees, and significant time delays.
Void Transactions: The Hidden Commercial Risk
Section 10A(1) clearly states that a company shall not commence any business or exercise any borrowing powers unless the declaration is filed. This means all business activities conducted before INC-20A approval may be legally challengeable: share agreements and issuances, sales and purchase transactions, borrowing and lending arrangements, employment contracts, and all other commercial agreements. While courts have not uniformly voided all such transactions, the legal risk is real and creates uncertainty for counterparties, investors, and lenders.
Filing Process on MCA V3 Portal
The Deeper Implication
According to CS Sapna Malpani, “INC-20A is the most overlooked post-incorporation compliance. Many company formation agents handle the incorporation but forget to follow up on this filing. By the time the founders realise, the 180-day window has passed and penalties start accumulating. For startups raising their first round, a missing INC-20A creates a red flag in investor due diligence — it suggests the company may have been operating illegally from day one.”
📋 Key Takeaways
- ✅ File INC-20A within 180 days of incorporation — no extensions available
- ✅ Applies to all companies with share capital incorporated on or after 2 November 2018
- ✅ Penalty: ₹50,000 on company + ₹1,000/day per officer (max ₹1,00,000)
- ✅ Non-filing triggers strike-off risk under Section 248
- ✅ All business conducted before filing may be legally void under Section 10A(1)
- ✅ MCA has imposed penalties of ₹2.5 lakh on companies for this single non-compliance
- ✅ Missing INC-20A is a red flag in investor due diligence for startups
Sources and References
- Section 10A, Companies Act 2013 — India Code
- MCA — Companies (Incorporation) Rules, 2014
- IndiaFilings — MCA ₹2.5 Lakh Penalty for INC-20A Non-Filing
- ClearTax — INC-20A Filing Guide
- TaxGuru — Form INC-20A Penalties
Need to File Form INC-20A?
For INC-20A filing assistance and post-incorporation compliance: Contact CS Sapna Malpani | WhatsApp
Frequently Asked Questions
What is Form INC-20A and who must file it?
Form INC-20A is a Declaration of Commencement of Business filed under Section 10A of the Companies Act 2013. It is mandatory for every company with share capital incorporated on or after 2 November 2018. The declaration confirms that all subscribers to the Memorandum of Association have paid the value of shares agreed to be taken by them. It must be filed within 180 days of incorporation on the MCA V3 portal.
What happens if INC-20A is not filed within 180 days?
Non-filing attracts a penalty of ₹50,000 on the company and ₹1,000 per day on every officer in default (capped at ₹1,00,000). More critically, the Registrar can initiate strike-off proceedings under Section 248. The company cannot legally commence business or exercise borrowing powers, and all transactions conducted may be legally challengeable as void under Section 10A(1). MCA has imposed penalties of up to ₹2.5 lakh in documented cases.
Can a company conduct business before filing INC-20A?
Section 10A(1) explicitly states that a company shall not commence any business or exercise any borrowing powers unless INC-20A is filed. Transactions conducted before filing may be legally void — this includes share issuances, sales, purchases, borrowing, and employment contracts. While courts have not uniformly voided all such transactions, the legal risk creates uncertainty for counterparties, investors, and lenders.
What documents are needed to file Form INC-20A?
The key document is proof that subscribers have paid the agreed share capital — typically a bank statement showing the credit to the company’s bank account. The form must be verified by a Chartered Accountant or Company Secretary in practice and signed with the director’s Digital Signature Certificate (DSC). The filing fee on the MCA V3 portal is ₹200 for normal filing. Companies should ensure the bank account is opened and share capital is deposited before the 180-day deadline expires.
Disclaimer: This article is for general informational purposes only and does not constitute legal or professional advice. The information is based on the Companies Act 2013 and related rules as available at the time of writing. For advice specific to your company, please consult a qualified Practising Company Secretary or legal professional. CS Sapna Malpani provides professional consultations — contact here.