INC 20A

Who Needs This Service

Every newly incorporated private company, public company or OPC with share capital that wants to start business or borrow money needs INC-20A. It is especially relevant for startups that incorporate first and then take time to raise capital, because the 180-day deadline can pass quickly.

Founders who deposit subscription money late, or who use a different account or names that do not match the subscribers, often run into problems at the filing stage. It is therefore wise to deposit the capital soon after incorporation and keep the bank statement ready.

Companies that missed the deadline should file as early as possible, paying the additional fee, to avoid penalties and possible strike-off proceedings.

If your company was incorporated before 2 November 2018, this requirement does not apply to it in the same way, so check your date of incorporation.

Key Benefits

• Allows the company to legally start business and borrow
• Avoids a Rs 50,000 penalty on the company and daily penalties on officers
• Complete document set: board resolution, bank proof and professional certification
• Checks that subscribers' payments match the subscribers' names
• Protects against strike-off action

Next Steps & Related Services

After INC-20A, the company can begin operations and borrow.

Related services: Post Compliance, ADT-1, Annual Compliance, GST Registration and Increase of Authorised Capital.

Common Mistakes

• Depositing subscription money in a personal account or not matching subscribers' names.
• Forgetting to verify the registered office through INC-22.
• Waiting until the last days of the 180-day window.
• Starting business or borrowing before filing.
• Not keeping the bank statement and board resolution on record.

Timeline, Costs & Practical Tips

INC-20A must be filed within 180 days of incorporation. Costs are the filing fee based on authorised capital plus professional certification charges. Late filing triggers extra fees and a Rs 50,000 penalty on the company.

Practical tip: deposit subscription money as soon as the company is incorporated, from accounts matching each subscriber's name, and keep the bank statement ready.

Additional Information

Section 10A of the Companies Act, 2013, inserted in 2019, requires companies with share capital to file a declaration that subscribers have paid for their shares before they commence business or exercise borrowing powers. It was introduced to curb shell companies that incorporate without bringing in capital. The Registrar can also treat a company that has not filed the declaration as inactive and consider striking it off. Understanding this purpose helps founders see why bank statements and certification are central to the filing.

Practical Scenarios

Scenario 1:

A newly incorporated startup raises its first seed money and finds that INC-20A must be filed before it can borrow or start operations.

Scenario 2:

A founder deposited subscription money late and needs a bank statement and certification to file within the 180-day window.

Scenario 3:

A company that missed the deadline wants to file with additional fees to avoid strike-off action.