Form INC-20A: Commencement of Business for a Newly Incorporated Indian Subsidiary

Prepared by AU Corporate's CA-led advisory team · Published 14 October 2026 · General information; confirm the current statutory requirement and deadline before acting.

A Certificate of Incorporation is not, on its own, a licence to begin operating. For a company with share capital, current Indian company law generally expects a declaration confirming that subscribers have paid for their shares before the company can commence business or exercise its borrowing powers. For a foreign parent used to a different incorporation process, this is an easy step to overlook between the first board meeting and the first invoice.

1. Understand why this step exists

The requirement is designed to confirm that a company with share capital actually received the capital its subscribers committed to, before it starts trading or borrowing. For a foreign-owned subsidiary, this directly follows the funding step: the US parent (or other subscriber) needs to have remitted the subscription amount into the Indian company's bank account, and that receipt needs to be evidenced.

See our minimum capital guide for what "subscription money" means in practice, and the first board meeting guide for the governance step that typically precedes this filing.

2. Confirm what evidence the company needs

• A bank statement or equivalent evidence showing each subscriber's payment received into the company's account.
• The board resolution or director confirmation supporting the declaration.
• Any sector-specific regulatory approval the company's activity requires, where that approval is itself a precondition under the current rules.
• Confirmation from the company secretary or adviser that the filing is complete and accurate before submission.

Do not assume that funds sitting in the parent company's own account, rather than the Indian subsidiary's account, satisfy this requirement. The money needs to have actually reached the Indian company.

3. Track the filing window

Current guidance describes a filing window measured in months from the date of incorporation, with restrictions on commencing business or borrowing until the declaration is filed. Because the exact number of days, the applicable form reference and any extensions can change, confirm the current deadline directly against the Companies Act, 2013 and the Ministry of Corporate Affairs' current guidance, or with a company secretary, rather than relying on a figure from an older article.

4. Understand the consequences of missing the deadline

Secondary sources describe financial penalties on the company and on officers in default, and note that continued non-compliance can be treated by the Registrar as grounds to consider removing the company from the register under separate provisions of the Act. Reported penalty amounts vary between sources and over time; do not rely on a specific figure without checking the current statutory text, since this guide deliberately does not restate a single number as settled fact.

If the deadline has already been missed, treat it as a compliance issue to resolve with a company secretary or adviser rather than something to leave unaddressed — the available remedies and any additional filings depend on the current rules and how long the delay has run.

5. Connect this to the wider compliance calendar

This filing is an early, one-time step, but it sits inside a broader first-year compliance sequence: registered-office confirmation, resident-director requirements, statutory registers, auditor appointment, tax and GST registrations, and the recurring filings that follow. See our post-incorporation compliance checklist for the fuller sequence.

Frequently asked questions

This article is general information, not legal advice. Confirm the current statutory requirement, deadline and evidence standard under the Companies Act, 2013 and Ministry of Corporate Affairs guidance before acting, and consult a qualified company secretary for the company's specific facts.