INC 20A- Commencement of Business Certificate explained

Ishita Ramani | Last updated: 16 March 2021

Save Share

Quick Summary

Form INC 20A is a certificate of commencement of business required for companies registered in India after November 2nd, 2018, that have a share capital. This certificate must be obtained within 180 days of the company's incorporation. Failure to file on time can result in significant late fees, which are calculated based on the delay period and can be several times the normal government fee.

What is INC 20A? Who should file INC 20A?

INC 20A Explained: Commencement of Business Certificate

Companies registered after the commencement of the Companies (Amendment) Ordinance, 2018 in India and having a share capital are required to file for the commencement of business certificate before commencing any business or exercising any borrowing powers. Any company incorporated after 2nd November 2018 would be required to get a Commencement of Business Certificate.

Time Limit for Obtaining Commencement of Business Certificate.

The commencement of business certificate must be obtained within 180 days of incorporation of the company.

Consequences of late filing of INC 20A:

As per a new amendment, INC 20A can be now filed with late fees as follows:

Fee for Obtaining Commencement of Business Certificate.

The Government fee for obtaining Commencement of Business Certificate is as below:

Nominal Share Capital	Fee applicable
Less than 1,00,000	Rupees 200
1,00,000 to 4,99,999	Rupees 300
5,00,000 to 24,99,999	Rupees 400
25,00,000 to 99,99,999	Rupees 500
1,00,00,000 or more	Rupees 600

If a company does not have a share capital, a fee of Rs.200 would be applicable. Further, in case of late filing of an application for Commencement of Business certificate, additional or higher Government fee as mentioned below would be applicable on top of the penalty payable.

Period of delay	All forms
Up to 30 days	2 times of normal fees
More than 30 days and up to 60 days	4 times of normal fees
More than 60 days and up to 90 days	6 times of normal fees
More than 90 days and up to 180 days	10 times of normal fees
More than 180 days	12 times of normal fees

FAQ :

INC 20A is a certificate of commencement of business that companies registered in India after November 2nd, 2018, with a share capital, must obtain before starting business operations or exercising borrowing powers.

Companies registered in India after the commencement of the Companies (Amendment) Ordinance, 2018, and having a share capital are required to file for the INC 20A certificate.

The commencement of business certificate (INC 20A) must be obtained within 180 days of the company's incorporation.

Late filing of INC 20A incurs late fees. The fees increase significantly based on the period of delay, ranging from twice the normal fees for up to 30 days late to 12 times the normal fees for delays exceeding 180 days.

The government fee depends on the nominal share capital. For companies without share capital, the fee is Rs. 200. For companies with share capital, the fee ranges from Rs. 200 to Rs. 600 based on the share capital amount.

14926 Views 1 Likes Comment Share Corporate Law Report

About the Author

Ishita Ramani

Director - Operations

She is a young woman entrepreneur and currently the Operations Director at ebizfiling India Private Limited. In her entire career so far, she has led a team of 50+ professionals like CA, CS, MBAs, and retired bankers. Apart from her individual experience on almost every facet of Indian Statutory Compliance, she has bee ... Read more

View Articles

Comments :