Declaration of Commencement of Business Overview, form INC-20A, due dates, Penalty, and others in 2023

Important mandatory compliance for all companies having share a capital

Declaration of Commencement of business is a kind of compliance in which a company having share capital is required to submit the declaration of commencement to the Ministry of Corporate Affairs registry (ROC) within 180 days of the date of registration of the company.

This Declaration of Commencement of Business is required to be filed before starting any business activities of the company. In which a director of the company declares that all subscriber of the memorandum has paid the value of the share as agreed by them at the time of subscribing to the memorandum/company registration time.

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#1. When does the Declaration of Commencement of Business come into force?

The Ministry of Corporate affair (MCA) vide its circular dated January 01, 2019, made amendments to the Companies (Incorporation) Rules, 2014, and brought new section 10A(1)a, which covered the concept of filing of declaration for comment of business within 180 days from the date of registration of the company to the Ministry of Corporate Affairs (MCA) registry. 

#2. Who is Required to File Declaration of Commencement of Business?

As per rule 10A of the Companies Act, 2013, every company having share capital is required to submit the form INC-20A within 180 days of the date of registration of the company.

This declaration is required to be filed by every type of company like Section 8 Company (having share capital), Nidhi Company, etc.

#3. What documents are required for the Declaration of Commencement of Business?

For filing the declaration of commencement of business through form INC-20A, below mentioned documents are to be required:

• Bank statement of the company (in which the subscriber transferred amounts reflected)
• A Photograph of the company registered office (inside and outside) with one director must be present in photographs
• Digital Signature of any one Director of the company.
• Longitude and Latitude of the registered office.

#4. What is the procedure for filing a Declaration of Commencement of business?

The procedure for filing the form INC-20A (Declaration of Commencement of Business) is explained as under:

• Before starting this process, the Director must have the required documents as mentioned above and the same should be certified by the company.
• any practicing professional in India like a Company Secretary, a Chartered Accountant, a cost accountant, or an advocate.
• Create an account as a business user on the MCA website (www.mca.gov.in) by filling in the company details like name, address, CIN, PAN, mobile number, email ID, etc., and create a user ID and password.
• Log in to the MCA portal with their created user ID & password, after logging in, click the MCA service tab then select the company e-filing Service tab, from the list of services select the informational service and select the form INC-20A (Declaration for commencement of business)
• After clicking on INC-20A a new window will open and the INC-20A form will appear for filling & filing purposes.
• After filling out the INC-20A Form applicant proceeded to download the form for affixing digital signature purposes.
• At last affix the digital signature of any one director of the company and a practicing professional then submit to the same and a challan will be created after making the payment of govt. fee.

#5. What is the due date of the Declaration of Commencement of Business?

The due date of declaration of commencement of business compliance varies from company to company.

As per section 10A (1)(A) of the Companies Act, 2013 a company having share capital is required to submit INC-20A within 180 days from the date of registration of a company.

For example, XYZ (P) Ltd. registered on April 01, 2023, for this company the form INC-20 (Declaration of commencement of business) due date will be September 30, 2023.

#6. What is the Govt. fee for the Declaration of Commencement of business?

For form INC-20A (Declaration of commencement of business) the govt. fee varies from company to company and depends on the nominal share capital of the company. The table below explains the details of the Govt. fee.

#1. Normal fees are to be charged in case filing within time.

Nominal Share Capital	Fee (in Rs.)
Less than 1 lac	200
1 lac to 5 lac	300
5 lac to 25 lac	400
25 lac to 100 lac	500
Above 100 lac	600

#2. Additional fees are to be charged in case of delay.

Period of Delay	Fee (in Rs.)
Up to 30 days	2 times of normal fee
30- 60 days	4 times of normal fee
60-90 days	6 times of normal fee
90-180 days	10 times of normal fee
Above 180 days	12 times of normal fee

#7. What is the Penalty for the Declaration of Commencement of Business?

If a company fails to submit the form INC-20A within the time frame as defined in section 10(A)(1)(A) of the Companies Act, 2013. Below mentioned penalty can be imposed on a company.

#Monetary Penalty

• A penalty of Rs. 50,000 can be levied on the company.
• Every officer in default shall be liable to a penalty of Rs. 1000 per day for each day of delay and a maximum penalty of Rs. 1,00,000.

#Non-monetary Penalty

Registrar of Company (ROC) on a reasonable ground to believe that company is not carrying business activities, may remove the name of the company from the register of companies.

#8. Consequence of non-filing Declaration of Commencement of Business?

If a company fails to submit the form INC-20A within the time frame as defined in section 10(A)(1)(A) of the Companies Act, 2013. consequences below are there.

• The Company cannot start business activities.
• The company cannot borrow money for business purposes.
• The company will not allow to file e-forms related to compliance.
• Registrar of Company (ROC) on a reasonable ground may remove the name of the company from the register of companies.

#9. Declaration of Commencement of Business: Quick Links

#Ministry of Corporate Affairs (MCA): www.mca.gov.in

#Form INC-20A: Click to view the demo form

#MCA Notification on Declaration for Commencement of Business: Click here to view the notification.

#10. How Biz Registration can help you file Declaration of Commencement of Business?

# Biz Registration is India’s leading consulting company that serves thousands of clients across the country, Biz Registration has teams of professionals who have more than 5 years of experience in this field. Contact, the Biz Registration team for completing your form INC-20A (Declaration of commencement of business) within less than 1 hour time.   

#11. Declaration of Commencement of Business– Frequently Asked Questions (FAQs)

Q-1 What is the Declaration for commencement of business?

Ans: Every company having share capital is required to submit the declaration for commencement of business in eForm INC-20A to the registry of the Ministry of Corporate Affairs (MCA) within 180 days from the date of registration of the company.

Q-2 Is it mandatory to file form INC-20A?

Ans: Yes, this is mandatory for all the companies having share capital. Without filing this form INC-20A, a company cannot start its business.

Q-3 What details are required to submit in form INC-20A?

Ans: For eform INC-20A compliance, company bank statement (must reflect the payment details of subscribers) and photographs of registered office inside and outside.

Q-4 What is the due date of form INC-20A?

Ans: Due date varies from company to company, as per section 10A (1) A, a company having share capital is required to submit e-form INC-20A within 180 days from the date of registration of the company.

Q-5 What is the penalty if not filed form INC-20A?

Ans: If a company having share capital fails to submit the e-form INC-20A, a monetary penalty of Rs. 50,000 will be levied on the company and Rs. 1000 per day on each delay day will be levied on its officer subject to a maximum of Rs. 1,00,000/-

Q-6 Who is not required to submit INC-20A?

Ans: A company having no share capital, is not required to file e-form INC-20A.

Q-7 Can the company close without filing the INC-20A?

Ans: No, as this is a mandatory compliance before closing a company compliance should comply with this compliance.

Q-8 Is there a change in e-form INC-20A after introducing V3 on MCA?

Ans: Yes, in V3 additional attachment of the registered office photograph has been inserted.

Q-9 What is the Govt. fees for form INC-20A?

Ans: Govt. fee depends on the nominal capital of the company, which starts from Rs.200 and a maximum of Rs.600.

Q-10 Is there any same compliance in LLP?

Ans: No, there is no related compliance in LLP.