Commencement of business (Form INC-20A): rules and deadline
A company with share capital must file a commencement of business declaration in Form INC-20A within 180 days of incorporation under section 10A.
Short answer
Commencement of business is the declaration that a company with share capital must file before it starts business or exercises borrowing powers. Under section 10A of the Companies Act, 2013, a director files Form INC-20A within 180 days of incorporation, confirming that every subscriber has paid the value of the shares agreed in the memorandum.
- Governed by
- Section 10A, Companies Act 2013
- Form
- INC-20A
- Deadline
- Within 180 days of incorporation
- Applies to
- Companies with share capital incorporated after 2 November 2018
What the declaration involves
Before filing INC-20A, the company opens a bank account and the subscribers deposit their subscription money. The form is filed with a copy of the bank statement or other proof of payment and is verified by a practising professional where required. Companies needing approval from a sectoral regulator, such as the RBI, must also attach the registration or approval. Section 10A applies to companies incorporated on or after 2 November 2018 that have share capital.
Consequences of not filing
If the declaration is not filed within 180 days, the company is liable to a penalty of ₹50,000, and every officer in default to ₹1,000 a day, up to ₹1 lakh. The company cannot commence business or borrow. Under section 10A(2), if the ROC has reason to believe the company is not carrying on business, it may initiate strike off proceedings. The ROC also has power to physically verify the registered office.
Why it matters for startups
INC-20A is easy to forget because it falls months after incorporation, when founders are focused on product and sales. Open the bank account and collect subscription money in the first weeks, then file promptly. Investors and banks check for INC-20A during diligence, and filing late adds penalties that are far higher than the cost of timely compliance.
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Sources
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
Is INC-20A required for an LLP?
No. Section 10A applies only to companies with share capital.
Can I file INC-20A after 180 days?
Filing is still possible, but the penalty applies and the ROC may start strike off proceedings in the meantime.
Does a Section 8 company file INC-20A?
A Section 8 company with share capital incorporated after 2 November 2018 must file it, while one without share capital need not.