INC 20A Form – Declaration For Commencement Of Business

INC 20A Form, also known as the Declaration of Commencement of Business, is a mandatory form to be filed by a company incorporated on or after 02/11/2018 with MCA.

The directors will file the INC 20A form once the Company receives a certificate of incorporation. Every promoter must open a current account in any of the banks to settle the share capital subscribed in MOA. 

Benefits of filling out Form 20A

• Eligibility for Borrowing: Filing the form 20A qualifies a company to use its borrowing authority to receive money from banks, financial institutions, and other sources. A business that fails to file the 20A Form is ineligible to borrow money.
• Dodge Fines & Penalties: A company should have filed the INC 20A Form within 180 days of its incorporation. The Companies that have filed the form can avoid fines and penalties. 
• Authenticate the Business: The vital information of a company that has filed INC 20A Form within 180 days of incorporation is included in a public database. The Company is validated, and the public can access the details of that Company. 

Which companies require filing Form 20A?

• Every Company incorporated after 2nd November 2018 should file INC 20A form.
• All Companies with share capital.

Which companies do not require filing Form 20A?

• Companies incorporated before 2nd November 2018 need not file. 
• Companies incorporated after 2nd November 2018 that does not have share capital.

The due date for filling out Form 20A

Generally, the due date to file the declaration is within 180 days from the Company’s date of incorporation.

Procedure and requirements to file Form 20A

• Visit and check the MCA PORTAL.
• Click on MCA Services. You will find a dropdown box. Select the option e-filing.
• Then choose the Company forms.
• A window will open. Scroll right down to “informational services.” In that, click on Form 20A. The form and the instruction are downloaded.
• The form is downloaded in a pdf file format. After downloading the form, fill in the necessary details, like the Corporate Identification Number of the entity.
• After this, click on the “Pre-fill” button. Following this, the Company’s name, office address, and email id will be displayed automatically.
• Attach the required documents to the form. After that, fill out the declaration portion by providing DIN.
• After filling in the information, the applicant must click on the Check option. The form will be validated.
• After successful validation of the form, click on Pre scrutiny.
• The director or authorized person should digitally sign the completed form. Add the DSC of the directors and authorized professionals within the form.
• In the final step, visit the MCA Portal. Then click on upload e-forms. Payment is completed after unloading the document fees. SRN is generated following that.
• The Declaration form is duly signed and filed.

Documents required filing for 20A

• Proof acknowledging the amount paid by the shareholders as indicated in the (MOA) for the value of the shares. The Company’s bank account statements are attached along with INC 20A Form for this purpose.
• The Company must get a certificate of a business start-up within 180 days after incorporation. Then the Registrar of Companies must then get this certificate.
• A declaration of the board resolution following section 10A of the Companies Act of 2013 must be submitted by the Company’s director(s)
• A registration or clearance must be attached in addition to the declaration if the Company pursues objectives that need registration or support from a sectoral regulator, such as the Reserve Bank of India (RBI) or the Securities and Exchange Board of India, etc., 

Penalties for non-filing

• If the Company fails to fill INC 20A form, it will be liable to pay Rs. 50,000 penalty 
• Every officer is liable to pay Rs. 1000/- per day. The fine may be extended up to a Maximum of Rs. 1,00,000/- if he defaults.
• In case of default, the Registrar may initiate action. The Company’s name may be removed or stroked off. 

Fee for filling out Form 20A

• The form could be filed with nil fees if e- Form INC-22A is filed before 25th April 2019. 
• In case, if e-Form INC -22A is filed after 26th April 2019, then a fee of 10,000/- has to be remitted

Conclusion

INC 20A Form is a newly proclaimed document among corporate. MCA has brought this new e-form INC 22A to rectify issues such as cheating investors, authorities, incorrect registered addresses, and the use of inactive companies during the demonetization period.