Form INC-20A

Form INC 20A is an obligatory filing required by the Ministry of Corporate Affairs (MCA) to confirm that a newly incorporated company has completed all the legal requirements and has started its business undertakings. As per the Section 10A of the Companies Act, 2013, the INC 20A form must be filled within 180 days from the date of a company’s incorporation.

This form works as a formal declaration by the company that it has conformed to the set capital requirements and has commenced operations. The company has to submit this form with the Registrar of Companies (ROC) confirming the commencement of business. If the form is not filed within the specified time limit, the company may face stringent penalties and may be removed from the MCA register. 

Form 20A is an important document for a company to establish its valid existence as an operating entity. By filing this form, the company notifies officials that the company has completed all the legal formalities and is ready to carry out its business activities by following the law.

Key Purpose of Form INC 20A (Commencement of Business Certificate)

Form INC 20A plays a major role in validating the corporate regulatory framework. This ensures that newly incorporated companies meet the required compliance standards. The key purpose of this form are as follows:

• Validation of Business Commencement: Form INC 20A serves as a formal declaration authorizing that the company has commenced its business activities, which also includes meeting minimum capital requirements as per law. This marks the actual legal start of business for the company.
• To Ensure Legal Compliance: Filing Form INC 20A is a legal requirement under the Companies Act, 2013. This ensures that companies meet the rules regarding regarding their minimum paid-up capital and the operational commencement within the prescribed timeframe of 180 days from incorporation.
• Preventing Fraudulent or Shell Companies: This form acts as a safeguard against the formation of shell companies or fraudulent businesses. By instructing the declaration of business inauguration, it confirms that only legitimate businesses with the necessary capital can operate.
• Fulfilling Statutory Obligation: Form INC 20A makes sure that companies comply with statutory requirements directed by the government, which helps in maintaining fair transparency and liability in the corporate sector. Building trust with regulatory bodies and stakeholders is an important step.
• Authorization to commence Business Activities: The Company is legally required to file a form before starting business activities. This certifies that the company is a legal business entity and is fully authorized to operate, enter into contracts and conduct financial transactions.
• Minimizing the Legal Risk: Timely filing of Form INC 20A reduces the risk of fines or legal challenges. This helps in maintaining the credibility of the company and ensures that the business can operate without any compliance related hassles.

Who should File Form INC 20A?

Under the provisions of the Companies Act, 2013, every company incorporated in India, whether public or private, is required to file Form INC 20A. The company is required to file valid forms within 180 days from the date of incorporation. This is a mandatory filing to prove that the company has received the minimum paid-up capital and commenced its business operations.

Failure to file these forms in time can result in serious penalties, including fines and removal of the company from its official register. In addition, the Director of the Company takes the responsibility of accuracy and timely submission of the forms to the Ministry of Corporate Affairs. It is an important step for every new company to take in order and get legally recognized and start its operations.

There are several advantages of filing Form 20A, extending from legal compliance to enhancing the credibility of the business. Some of the main advantages includes the following: 

• Ensures Legal Compliance: By filing form INC 20A, companies comply with the legal requirements set by the Companies Act, 2013, ensuring their business operations are completely legal. 
• Confirms Business Commencement: Filing the Form ensures that the company has commenced business operations and has met the minimum paid-up capital requirements, thereby becoming a recognized operating entity.
• Avoids Penalties and Striking Off: Timely filing assures that the company is protected from fines, penalties or removal of its name from the Ministry of Corporate Affairs (MCA) register due to non-compliance.
• Improves Business Credibility: Form filing improves the company's credibility in the eyes of investors, customers and financial institutions, thereby proving that the business is in compliance with statutory requirements.
• Helps Prevent Legal Issues: By complying with the filing requirement, companies evade future legal obstacles or disputes over their legality or operational status.
• Establishes Transparency: Filing the INC 20A Form enhances transparency for the business community and assures stakeholders that the company is operating within legal limits.

To successfully file Form INC 20A, the company has to submit the following documents. These documents provide the necessary evidence that the company has met the minimum requirements:

• Certificate of Incorporation: A copy of the company's certificate of incorporation issued by the Ministry of Corporate Affairs.
• Proof of Registered Office: A utility bill or lease agreement that confirms the registered office address of the company.
• Bank Account Statement: Bank statement of the company displaying the deposit of the minimum paid-up capital.
• Board Resolution: A copy of the Board of Directors' resolution stating the commencement of business activities.
• Director's Declaration: A declaration signed by one of the company’s directors testifying that the company has met all essential legal requirements for business commencement.

The process of filing Form INC 20A is simple, but it is important to follow each and every step closely to certify compliance with the legal requirements. The outline of this process is as follows:

• Verify Minimum Capital and Office: Before filing, ensure that the company has met the minimum required paid-up capital and that it has a registered office in place before proceeding with the filing.
• Collect Documents: Collect all the essential documents such as the Certificate of Incorporation, bank statement, proof of office, and the director’s declaration confirming the commencement of business.
• Visit MCA Portal: Visit the Ministry of Corporate Affairs (MCA) portal and enter your login details with the required credentials to file the form.
• Complete the form: Fill in Form INC 20A with valid details, providing correct information regarding incorporation and commencement of business.
• Sign the Form: The submitted form must be signed by the company and director. Before signing, ensure that all the information is correct.
• Form Submission: Once the form is signed and complete, submit it online through the MCA portal. After submission, the company will receive an acknowledgment from the Registrar of Companies. 

The validity of Form INC 20A is linked to the 180 days of incorporation and completion of valid filing work. Once filed, it ensures the company's commencement of business and acquiescence with statutory regulations. If any business operation is active or ongoing, then the form remains valid. If the form is not filed within the stipulated time, the company may face fine or its register may be removed, which may lead to the termination of its business activities. The fee for filing the form INC 20A, differs depending on the certified capital of the company and is subject to changes prescribed by the Ministry of Corporate Affairs (MCA).

Corpseed is number one consultancy offering expert solutions for company registration and compliance services. With years of experience in the industry, Corpseed ensures that your filing of Form INC 20A is done precisely and on time. Our team of professionals provides comprehensive guidance to navigate the filing process, making it simpler for businesses to comply with legal regulations. Our commitment to customer service, attention to detail, and industry expertise makes us the go-to consultancy for business owners looking to ensure unified company registration and compliance.