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What is Form INC-20A?

As per the provisions of Section 10A of the Companies Act, 2013, a Company incorporated after the commencement of the Companies (Amendment) Ordinance, 2018 (2nd November 2018) and having a share capital shall not commence any business or exercise any borrowing powers unless a declaration (INC-20A) is filed by a director within a period of one hundred and eighty days of the date of incorporation of the company in such form and verified in such manner as may be prescribed, with the Registrar 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.

CONSEQUENCES of delay in filing INC-20A: 

a) If any default is made in complying with the requirements of Section 10A, 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 an amount of one lakh rupees.

b) The Registrar of Companies shall issue a show-cause notice as to why the penalty should not be imposed on the company and the officers in default for non-compliance of Section 10A of the Companies Act, 2013. The reply to show cause notice should be given within 15 days from the date of receipt of show cause notice. If your reply is not received within the stipulated period or found to be unsatisfactory, the adjudicating authority shall pass the necessary orders for imposing the penalty.

c) After reply to show cause notice is received, the ministry of corporate affairs shall issue Adjudication Order(ADJUDICATION OF PENALTY UNDER SECTION 454 FOR DEFAULT IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 10A OF THE COMPANIES ACT, 2013 READ WITH THE COMPANIES (ADJUDICATION OF PENALTIES) RULES, 2014.)

The Ministry of Corporate Affairs shall appoint the Registrar of Companies, as Adjudicating Officer under the Companies Act, 2013. Under the provisions of section 454 and 10A read with adjudication rule, the adjudicating authority is not vested with the power to extend the statutory limit of 180 days for filing or to condone the delay in filing resulting the waiver of prescribed penalty. Hence the adjudicating authority has no power to reduce or waive the penalty.

d) It may be remarkable to note that provisions(Sec 446-B) of lesser penalty for small companies and one-person companies is not applicable for default in complying with the requirement of Section 10A of the Companies Act, 2013 and further that such rebate is not extendable to Section 8 companies and or Producer Companies.

Form INC-20A: Consequences of delay in filing


a) ROC was not able to levy a lower fee in view of the mandatory requirement to levy the minimum penalty for adjudication as per the Companies (Adjudication of Penalties)Rules, 2014. However, the respective Regional Director has the power to consider the facts and reduce the quantum of penalty.

b) An appeal against the adjudication order can be filed with the respective Regional Director, Ministry of Corporate Affairs, within a period of sixty days from the date of receipt of the adjudication order.


c) Forms to be filed with MCA for appeal

Form No. ADJ(Memorandum of Appeal)- It should be filed within 60days from the date of adjudication order.
Form No. GNL-2(Form for submission of documents with the registrar).


(Based on authors observation)

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Published by

CA Sarath R Krishnan
(Chartered Accountant)
Category Corporate Law   Report

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