Company filings
I missed filing INC-20A — what's the penalty, and can I still fix it?
If your company hasn't filed Form INC-20A within 180 days of incorporation, the penalty is ₹50,000 on the company plus ₹1,000 per day per defaulting director (capped at ₹1,00,000 per director), and the Registrar can begin strike-off. The form can usually still be filed late with additional fees — but after long delays you may need a condonation route, and adjudication orders of ₹2.5 lakh and more have been issued for non-filing. File now; the per-day clock only stops when you act.
What INC-20A is and why founders miss it
INC-20A is the declaration of commencement of business under Section 10A of the Companies Act, 2013. Every company incorporated after 2 November 2018 with share capital must file it within 180 days of incorporation, confirming that subscribers have paid for their shares. Until it's filed, the company cannot legally commence business or borrow.
Founders miss it because nothing operational forces it: the bank account works, GST registration works, invoices go out. It surfaces months later — in a due-diligence checklist, a loan application, or an MCA notice. Forum threads from founders facing exactly this ('is there any way I can avoid the penalty?') are common, including companies with no revenue, no bank account and no activity that are still trapped by it.
The exact penalty math
Two separate consequences stack: a company-level penalty of ₹50,000, and a per-director penalty of ₹1,000 for every day of default, capped at ₹1,00,000 per director. A two-director company that is 100 days late is therefore exposed to ₹50,000 + 2 × ₹1,00,000 in the worst case — before professional fees.
Beyond money: the Registrar may, after the 180-day window, initiate action to strike the company off the register under Section 10A(3) read with Section 248, and directors of struck-off companies face disqualification consequences that follow them to their next venture.
Can you still file late?
Usually yes. The MCA portal generally accepts INC-20A with additional fees after the 180-day deadline, and the practical advice in most cases is simply to file immediately — the per-day exposure stops accruing on filing. Where the portal refuses the form (very long delays, or the company can't produce proof of subscription money), the route is a condonation/adjudication process before the Registrar or Regional Director, typically with professional help.
Documented adjudication orders show what non-filing costs when it reaches the Registrar: penalty orders of ₹2.5 lakh against a company for not filing INC-20A are on record. Acting before a notice arrives is materially cheaper than responding to one.
If the company never started, consider exit instead
If the company is genuinely dormant — no business, no liabilities — paying to regularise INC-20A only to then maintain ₹40,000+ a year of mandatory audit, ROC and ITR compliance may be the wrong trade. A voluntary strike-off (Form STK-2) can be the cleaner exit; whether INC-20A must be regularised first depends on the company's facts, which is a question for your CS. The expensive mistake is the middle path: neither filing nor closing, while the per-day clock and annual filings pile up.
Frequently asked questions
Is there any way to avoid the INC-20A penalty entirely?
Not realistically once the 180 days have passed — the penalty provisions are statutory. What you control is how much accrues: filing immediately stops the per-day exposure, and adjudication officers have discretion within the prescribed limits. Some companies have sought relief citing genuine hardship, but plan on paying additional fees at minimum.
Can the company operate while INC-20A is pending?
Legally, no — a company that hasn't declared commencement of business shouldn't commence business or exercise borrowing powers. Operating anyway adds to the risk profile if the matter reaches adjudication.
Does this apply to LLPs or OPCs?
LLPs don't file INC-20A — it's a Companies Act requirement for companies with share capital (including OPCs and Section 8 companies incorporated after 2 Nov 2018). LLPs have their own initial and annual filings (Form 3, Form 11, Form 8) with their own late-fee regimes.
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