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Declaration of Commencement of Business (Form INC-20A)

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Overview

Rules

Documentation

Consequences

Declaration Of Commencement Post Incorporation Of Your Company

Launching a company in India? After setup, you can’t just dive into operations. You need to declare that your business is ready to start—this is called the Commencement of Business declaration (Form INC 20A). It’s a simple check to ensure your company has the basics in place before earning or borrowing. Under the Companies Act, 2013, this keeps things fair and prevents shell companies. We’ll break it down simply, focusing on what matters most.

Why Bother with This Declaration?

It’s like getting a green light from the government. It confirms:

  • All initial shareholders have paid their shares.
  • Your registered office is verified.

The Rules in Plain Terms

Section 10A of the Companies Act, 2013 says that if your company has share capital and was formed after November 2, 2018, the Company shall not start its business or borrow any funds unless it files a Declaration of Business Commencement in Form INC 20A within 180 days from the date of incorporation.

Documentation Required?

  1. Declaration by Director: A declaration signed by a director stating that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of making of such declaration. 
  2. Bank Statement: Bank Statement of the Company showing the money deposited by the subscribers to the Memorandum of Association (MoA). 
  3. Photo of Director: One photo of the director outside of the building with your company name board, and one inside showing furniture/setup.

The standard chunk of Lorem Ipsum used since the 1500s is reproduced below for those interested. Sections 1.10.32 and 1.10.33 from “de Finibus Bonorum et Malorum” by Cicero are also reproduced in their exact original form, accompanied by English versions from the 1914 translation by H. Rackham.

What are the Consequences of Non-Filing?

  1. The Company may be imposed a penalty of Rs. 50,000, and every “officer in default” (like directors) may face a penalty of Rs. 1,000 per day of delay, up to a maximum of Rs. 1 lakh.
  2. The Registrar of Companies may also strike your company off the register if he has reasonable grounds to believe that the Company is not carrying out any business.

Frequently Asked Questions

How do I start a business in India as a foreign company?

Foreign companies can set up a liaison office, branch office, or wholly-owned subsidiary in India. Corpsecure assists with RBI, FEMA, and ROC compliances for a smooth entry.

What is the cost of company registration in India?

The cost depends on the type of company (Pvt Ltd, LLP, OPC, etc.) and government fees. On average, registration can start from ₹7,999 onwards with professional assistance.

How long does it take to register a company in India?

With proper documents, company registration can take 7–15 working days. Corpsecure ensures faster turnaround by managing documentation and compliance.