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Brought in your Share Capital Money, File this form INC 20A after incorporation without fail to avoid penalties

Virtual AuditorPublished: 31 Jul 2022🕒 3 min readLast updated: 14 Aug 2026

Quick Answer

Companies incorporated after 2nd November 2018 must file Form INC 20A within 180 days of incorporation to declare that initial subscription money has been received. Introduced by the Companies (Incorporation) Fourth Amendment Rules, 2018, this filing is mandatory to commence business operations and avoid potential penalties or company removal.

Ministry of Corporate Affairs has added a new form Form INC 20A after the company Registration file Form INC 20A, declaring that the paid up share capital has been brought in, vide Companies (Incorporation) Fourth Amendment Rules, 2018 dated 18th December 2018

In simple terms once the company is formed the share holders subscribe to the share capital of the company  they need to bring in the agreed money as share capital in the company From Now, the Subscribers to the Memorandum of Association of the Company cannot delay the refusal of their  money in respect of the shares subscribed by them.

What is the Timeline for Bringing to share the paid-up agreed in the Bank account?

Until now, the Companies Act is silent as to when the payment in respect of the shares agreed to be subscribed by them and there was no timeline set for it
The subscribers would be deemed to have agreed to become members of the company and on its registration, the name of subscribers is required to be entered as members in the register of members of the company.
It may be noted that the Form INC 20A is required to be filed by every Company incorporated after 2nd November 2018 within 180 days from the date of incorporation along with the evidence of receiving initial subscription money. Without this, the Company can’t commence its business operations
What Does Authorized Capital and paid-up capital mean? To know more click here
How to file FORM –INC-20A TO BE FILED AUTHENTICATING THAT INITIAL SUBSCRIPTION MONEY HAS BEEN RECEIVED?

[Pursuant to Section 10A(1)(a) of the Companies Act, 2013 and rule 23A of the Companies (Incorporation) Rules, 2014] After the Commencement of the Companies (Incorporation)Fourth Amendment Rules, 2018 which came into effect from 18th December 2018  requires the following:

Declaration at the time of commencement of business.-The declaration under section 10A by a director shall be in Form No.INC-20A and shall be filed as provided in the Companies (Registration Offices and Fees) Rules, 2014 and the contents of the said form shall be verified by a Company Secretary or a Chartered Accountant or a Cost Accountant, in practice:

FORM INC-20A HAS TO BE FILED FOR THE FOLLOWING:

  • Subscribers Proof of Payment for the value of shares.
  • Certificate of Registration issued by RBI in case of NBFC companies
  • Approval if any required by Securities and Exchange Board of India, (SEBI).

Full Context of the Gazzate notice can be accessed from this link INC 20A Notification 

What are the Penalties for Non-Compliance?

If any default is made in complying with the requirements of this section, the company shall be liable to a penalty of fifty thousand rupees and every officer  who is in default  shall be liable to a penalty of one  thousand  rupees for each day during which such default continues  but not exceeding the number of one lakh rupees. ( Rs.1000 Per day of Default up to a maximum of Rs Rs 1,00,000/- ) 

Where  no  declaration  has  been   filed  with  the Registrar under clause (a) of sub-section (1) within a period of one hundred and eighty days of the date of incorporation of the company and the Registrar has reasonable cause to believe that the company is not carrying on any business or operations, he may, without prejudice to the provisions of sub-section (2), initiate action for the removal of the name of  the  company  from  the  register  of  companies  under Chapter XVIII.

For Any support relating to filing of INC 20 A, please contact experts Virtual auditor at +91 9962230333  /9513939333 / 044 -48560333 mails us support@virtualauditor.in

Frequently Asked Questions (FAQs)

1. What is Form INC 20A?

Form INC 20A is a mandatory declaration filed by companies incorporated after 2nd November 2018 to confirm that shareholders have brought in the agreed initial subscription money. It serves as proof of payment and is required for a company to commence its business operations.

2. When must a company file Form INC 20A?

Every company incorporated after 2nd November 2018 is required to file Form INC 20A within 180 days from the date of its incorporation. Failure to file this declaration within the specified timeframe can lead to penalties and potential removal from the register of companies.

3. Who can verify the contents of Form INC 20A?

The contents of Form INC 20A must be verified by a professional, specifically a Company Secretary, a Chartered Accountant, or a Cost Accountant who is in practice. This verification is a requirement under the Companies (Incorporation) Fourth Amendment Rules, 2018, which became effective on 18th December 2018.

4. What are the penalties for failing to file Form INC 20A?

Non-compliance results in a penalty of fifty thousand rupees for the company. Additionally, every officer in default is liable for a penalty of one thousand rupees for each day the default continues, up to a maximum total penalty of one lakh rupees for the officer.

5. Can the Registrar remove a company for not filing Form INC 20A?

Yes. If the declaration is not filed within 180 days of incorporation and the Registrar has reason to believe the company is not carrying on business, they may initiate action to remove the company's name from the register of companies under Chapter XVIII of the Companies Act.

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