Comprehensive Guide to Filing Form INC-20A: Declaration for Commencement of Business in India

Introduction

Form INC-20A is a mandatory filing under the Companies Act, 2013, that certain companies must submit to the Registrar of Companies (RoC) to declare the commencement of their business. This guide provides a detailed overview of Form INC-20A, including who needs to file it, due dates, the step-by-step filing process, and penalties for non-compliance.

What is Form INC-20A?

Form INC-20A is a declaration filed by a company incorporated in India after the commencement of the Companies (Amendment) Ordinance, 2018. This declaration confirms that the company has received the subscription money from its shareholders and is ready to commence its business activities.

Who Needs to File Form INC-20A?

The following companies are required to file Form INC-20A:

1. Companies incorporated after November 2, 2018: All companies registered under the Companies Act, 2013, including private companies, public companies, and one-person companies.
2. Companies with share capital: The form must be filed by companies having a share capital.

Exemptions:

1. Companies incorporated before November 2, 2018.
2. Companies not having a share capital.

Due Date for Filing Form INC-20A

The due date for filing Form INC-20A is within 180 days from the date of incorporation of the company. For instance, if a company was incorporated on January 1, 2023, the due date for filing Form INC-20A would be June 30, 2023.

Consequences of Non-Compliance

Failure to file Form INC-20A within the stipulated time frame can lead to significant penalties and other legal consequences, including:

1. Company Penalty: The company shall be liable to pay a penalty of INR 50,000.
2. Officer Penalty: Every officer in default shall be liable to pay a penalty of INR 1,000 for each day of default, subject to a maximum of INR 1,00,000.
3. Company Status: The company may be restricted from commencing any business or exercising any borrowing powers.
4. Striking Off: The Registrar of Companies may initiate action to strike off the name of the company from the register of companies if the company fails to file the declaration within the prescribed time.

Step-by-Step Guide to Filing Form INC-20A

Step 1: Access the MCA Portal

1. Visit the Ministry of Corporate Affairs (MCA) official website at www.mca.gov.in.
2. Log in to your account using your credentials. If you do not have an account, you need to register and create one.

Step 2: Download the Form INC-20A

1. Navigate to the ‘Forms & Downloads’ section on the MCA portal.
2. Download the Form INC-20A (Declaration for Commencement of Business).

Step 3: Fill in the Required Details

Complete the form with accurate details, including:

1. Corporate Identity Number (CIN): Enter the unique identification number of the company.
2. Name of the Company: Provide the registered name of the company.
3. Address of the Registered Office: Include the complete address of the registered office.
4. Date of Incorporation: Mention the date on which the company was incorporated.
5. Paid-up Capital Details: State the amount of paid-up capital.
6. Details of Subscribers: Provide details of the subscribers who have paid the subscription money.

Step 4: Attach Required Documents

Attach the following documents:

1. Subscribers’ Proof of Payment: Bank statement, NEFT/RTGS receipts, or any other proof of payment received from the subscribers.
2. Board Resolution: Copy of the board resolution authorizing the filing of Form INC-20A.
3. Certificate of Incorporation: A copy of the certificate of incorporation for verification purposes.

Step 5: Affix Digital Signature

1. The form must be digitally signed by a director of the company.
2. Ensure that the digital signature certificate (DSC) of the director is registered on the MCA portal.

Step 6: Certification by Professionals

1. The form must be certified by a practicing Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant in whole-time practice.
2. The professional must use their DSC to certify the form.

Step 7: Upload the Form

1. Log in to the MCA portal and upload the completed and digitally signed Form INC-20A.
2. Pay the requisite filing fee using the available payment modes.

Step 8: Confirmation and Acknowledgment

1. After successful submission, an acknowledgment will be generated.
2. The RoC will review the form and the attached documents.
3. Upon approval, the commencement of business certificate will be issued to the company.

Conclusion

Filing Form INC-20A is a crucial compliance requirement for newly incorporated companies in India. Timely submission of this form ensures that the company can legally commence its business operations and avoid hefty penalties. By following this detailed guide, companies can navigate the process efficiently and ensure compliance with the regulatory requirements.

FAQs

1. Can Form INC-20A be filed after the due date? Yes, but it will attract penalties for late filing. The company and its officers will be liable to pay the prescribed penalties.

2. What happens if a company fails to file Form INC-20A? The company will not be allowed to commence its business or borrow money. Additionally, the RoC may strike off the company’s name from the register of companies.

3. Is there any fee for filing Form INC-20A? Yes, the fee depends on the nominal share capital of the company. It is specified in the Companies (Registration Offices and Fees) Rules, 2014.

4. Can the penalty for non-compliance be waived off? The penalties are statutory and cannot be waived off. However, companies can avoid these penalties by ensuring timely compliance.

By understanding and adhering to these requirements, companies can ensure smooth operations and compliance with Indian corporate laws.