www.lawizer.com

Lawizer

Tag: MCA compliance

  • What Happens If You Miss Your ROC Annual Filing Deadline?

    What Happens If You Miss Your ROC Annual Filing Deadline?

    ₹100 per day. No upper cap. The MCA (Ministry of Corporate Affairs) charges this late fee on every form filed after the ROC annual return deadline. The clock starts ticking the very next day. Miss AOC-4 and MGT-7 by just 78 days. The MCA will charge over ₹12,400 in penalties before you even factor in legal fees.

    And that’s just the financial hit. If you miss your filings for three consecutive years, the MCA can deactivate your directors’ DINs and prevent them from serving in any company for five years.

    📌 TL;DR: Missing your ROC annual filing deadline triggers an automatic penalty of ₹100 per day per form — with no maximum cap — under the Companies Act 2013. For a private limited company in India, this means AOC-4 and MGT-7 penalties compound simultaneously.

    If filings are missed for three consecutive financial years, directors face disqualification under Section 164(2) and lose their DIN across all companies. Lawizer can help you file late returns, clear penalties, and get your company back to compliant status — fully online.

    What You’ll Learn

    • Exact due dates for AOC-4, MGT-7, and MGT-7A — and when the penalty clock starts
    • How the ₹100/day penalty compounds across multiple forms and multiple years
    • What director disqualification under Section 164(2) actually means for you
    • The risk of company strike-off and how MCA initiates it
    • Steps to fix late filings and get back to compliance fast

    First, Let’s Get the Deadlines Straight

    Here’s the thing — most founders don’t miss the deadline deliberately. They miss it because they don’t know exactly when it falls.

    ROC filing deadlines are pegged to your AGM (Annual General Meeting) date, not a fixed calendar date, which trips up a lot of first-time company owners. Under MCA’s compliance framework, every private limited company must hold its AGM by September 30 each financial year.

    Once your AGM date is set, here’s exactly how the filing windows work:

    • Form AOC-4 (financial statements — balance sheet, P&L, auditor’s report): due within 30 days of the AGM. For a September 30 AGM, that’s October 29.
    • Form MGT-7 (annual return — shareholding, director details, compliance summary): due within 60 days of the AGM. For a September 30 AGM, that’s November 28.
    • Form MGT-7A (for OPCs and small companies): same 60-day window as MGT-7, but a simplified format.

    What most founders miss: even if your company had zero revenue, zero transactions, or zero employees, you still have to file. There are no exemptions for dormant or “inactive” companies under the Companies Act 2013. A NIL return is still a required return.

    The ₹100/Day Penalty — And Why It Adds Up Faster Than You Think

    The moment your filing window closes, the late fee kicks in automatically. The MCA charges ₹100 per day per form, with no ceiling. Let’s break this down with a real example.

    Say your AGM was on September 30, 2025. Your AOC-4 deadline is October 29, and your MGT-7 deadline is November 28. If you file both on January 15, 2026:

    AOC-4 — 78 days late

    ₹7,800

    MGT-7 — 48 days late

    ₹4,800

    Total late fees

    ₹12,600+

    How to Calculate Your Penalty on the MCA Portal

    You don’t have to guess. The MCA21 portal has a built-in fee calculator. Go to MCA Services → Fee & Payment Services → Calculate Fee, select your form and the date you plan to file, and it will show you the exact late fee before you proceed.

    Director Disqualification Under Section 164(2) — The Real Danger

    Paying a penalty is painful but recoverable. Director disqualification is a different beast entirely. Under Section 164(2)(a) of the Companies Act 2013, if your company fails to file its financial statements or annual returns for any continuous period of three financial years, every director of that company gets disqualified — automatically, without a hearing.

    Here’s what disqualification actually means. Your DIN (Director Identification Number — your unique director identity issued by the MCA) gets deactivated. You can’t be appointed as a director in that company or any other company for five years. In 2017, over 3.09 lakh directors across India were disqualified in a single sweep.

    A quick example: a Mumbai-based founder running three companies — one dormant, two active — who forgot to file for the dormant entity found himself locked out of all three companies. No board resolutions, no bank account signings, no compliance filings. For five years.

    Which Financial Years Put You in the Danger Zone Right Now?

    In 2026, companies that missed filings for FY 2022-23, FY 2023-24, and FY 2024-25 are entering the three-year non-compliance window. If your company is in this group, you need to act before the ROC acts.

    What Happens to the Company Itself — Strike-Off Risk

    Beyond director-level consequences, the company itself faces a serious threat: strike-off from the MCA register. Under Section 248 of the Companies Act 2013, the Registrar of Companies can remove a company’s name from the register if it’s in default of filing requirements.

    • Bank accounts can be frozen after the company is flagged as a defaulter by the ROC
    • Investors and banks check MCA21 compliance status before approving funding or loans
    • A non-compliant MCA record makes due diligence fail — fatal for startups in fundraising mode
    • Revival via NCLT petition is possible but involves legal fees, time, and court appearances

    How to Fix a Missed Filing — Your Step-by-Step Recovery Plan

    The short answer: file now, even if you’re late. Every day you wait adds ₹100 to each outstanding form, and you inch closer to the disqualification threshold

    Step 1

    Check pending years on MCA21

    Step 2

    Get financials audited by a CA

    Step 3

    File AOC-4 before MGT-7

    Step 4

    Pay late fees & submit

    Log into the MCA21 portal using your CIN (Corporate Identity Number) and check your filing history. If it’s two or more years pending, engage a CA immediately — the form sequencing gets complicated across multiple years. Always file AOC-4 (financial statements) before MGT-7 (annual return). Filing out of order can cause rejection on the portal.

    If you’d rather not navigate MCA21, form codes, and late fee calculations yourself, Lawizer’s compliance team handles the entire ROC annual filing process — from audit coordination to MCA submission — fully online, without a physical CA visit.

    Frequently Asked Questions

    Q: What is the penalty if I miss the ROC annual filing deadline in India?

    A: The MCA charges an additional fee of ₹100 per day per form from the date the filing was due until the date you actually file. There is no upper cap on this penalty. For a private limited company filing both AOC-4 and MGT-7 late, the penalties compound on both forms separately — even a 60-day delay on both forms means ₹12,000 in late fees, plus the standard government filing charges.

    Q: My company had no business activity last year. Do I still need to file ROC returns?

    A: Yes, absolutely. Every company registered under the Companies Act 2013 must file annual returns and financial statements — even if it had zero revenue, zero transactions, or no employees. Dormant companies must file NIL returns. Failure to file on the grounds of inactivity is not an accepted excuse by the MCA, and penalties apply equally.

    Q: Can a director be barred from other companies because of one company’s filing default?

    A: Yes, and this is one of the most misunderstood aspects of ROC compliance. Under Section 164(2)(a) of the Companies Act 2013, if any company you’re a director of fails to file for three consecutive financial years, your DIN gets deactivated and you’re disqualified from holding directorship in that company and every other company for five years.

    Q: How do I check if my company is at risk of being struck off by the ROC?

    A: Log into the MCA21 portal at mca.gov.in and search your company by name or CIN. The company master data page shows the filing history and current status. If your company is marked “Active (Non-compliant)” or you see missing entries for consecutive years, consult a CA immediately.

    Q: Is there a way to waive or reduce the ROC late filing penalty?

    A: There is no standard process to waive ROC late fees — the ₹100/day penalty is automatically calculated by the MCA system and cannot be negotiated. Historically, the MCA has occasionally introduced amnesty schemes (such as the CFSS — Companies Fresh Start Scheme) at reduced or waived penalties, but these are time-limited. File as soon as possible to stop the clock.

    Q: I missed ROC filings for two years. Can I still fix this without going to court?

    A: Yes — two years means you haven’t crossed the three-year disqualification threshold under Section 164(2), so you can still file late returns directly through the MCA21 portal by paying accumulated late fees. Work with a CA or a compliance platform like Lawizer to ensure the filing sequence and form data are accurate.

  • INC-20A: The Post-Incorporation Form Most Founders Have Never Heard OfS

    INC-20A: The Post-Incorporation Form Most Founders Have Never Heard OfS

    You just got your Certificate of Incorporation. You’re celebrating. But there’s a mandatory MCA form sitting on a 180-day countdown clock — and most new founders don’t even know it exists. It’s called INC-20A, the Declaration for Commencement of Business, and skipping it can freeze your company’s operations, trigger a ₹50,000 penalty, and get your company struck off the register entirely.

    This is one of the most overlooked post-incorporation compliance steps in India. Let’s fix that right now.

    📌 TL;DR: INC-20A (Declaration for Commencement of Business) is a mandatory MCA filing under Section 10A of the Companies Act, 2013 for every company incorporated in India on or after 2nd November 2018 with share capital. It must be filed within 180 days of incorporation. Without it, your company legally cannot conduct any business or borrow funds — and risks a ₹50,000+ penalty or strike-off. Lawizer helps founders file INC-20A quickly and correctly, fully online.

    What You’ll Learn

    • What INC-20A is and why the MCA introduced it in 2018
    • Which companies must file it, who is exempt, and the exact 180-day deadline
    • The documents you need, the step-by-step filing process on MCA21, and the penalties for missing the deadline
    • The one pre-condition most founders forget before they can even file

    What Is INC-20A and Why Does It Exist?

    INC-20A — officially the Declaration for Commencement of Business — was introduced through the Companies (Amendment) Ordinance, 2018, which inserted a new Section 10A into the Companies Act, 2013. It came into effect on 2nd November 2018.

    Before this change, a company could technically open its doors, sign contracts, and borrow money the day after getting its CIN (Corporate Identity Number). That loophole led to thousands of shell companies being registered with no real capital ever deposited.

    Here’s the thing. The MCA’s solution was elegant: make every new company formally declare, before doing anything, that its subscribers have actually paid up their share capital into the company’s bank account. That declaration is Form INC-20A.

    Think of it as your company’s “permission to operate” stamp — without it, your incorporation certificate is essentially incomplete from a business-operations standpoint.

    This form is filed under Rule 23A of the Companies (Incorporation) Rules, 2014, and needs to be certified by a practising Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant before submission on the MCA21 portal.

    Who Must File INC-20A — and Who Gets a Pass?

    Not every registered entity needs to file this form. Here’s a clear breakdown so you know exactly where you stand.

    Companies Required to File

    • Any company incorporated on or after 2nd November 2018 with a share capital — this includes Private Limited Companies, Public Limited Companies, and One Person Companies (OPCs)
    • Companies that need regulatory approvals from sectoral bodies like RBI, SEBI, or IRDAI must also attach proof of that approval along with INC-20A

    Companies Exempt from Filing

    • Companies incorporated before 2nd November 2018
    • Companies incorporated without share capital (such as Section 8 companies — non-profits)
    • LLPs (Limited Liability Partnerships) and Partnership Firms — these have separate governance structures and this form does not apply to them

    What most founders miss: if you registered your startup as a Private Limited Company in, say, Bengaluru or Delhi after November 2018 — which accounts for the vast majority of new incorporations today — you are legally required to file INC-20A before you send your first invoice or sign your first client contract.

    The One Thing You Must Do Before Filing INC-20A

    Let’s break this down, because this is the step that trips up most founders. Before you can even open the INC-20A form on the MCA21 portal, you must complete one prerequisite: deposit the subscription money into your company’s bank account.

    When you incorporated your company, each founder (subscriber) agreed in the Memorandum of Association (MOA) to take a certain number of shares at a specified value. The entire purpose of INC-20A is to confirm that all of that agreed share capital has actually been transferred into the company’s official current account.

    For example, if your company’s paid-up capital is ₹1,00,000, each subscriber must have deposited their proportionate share into the company bank account before the form is filed.

    A quick example: suppose two co-founders each hold 50% of a company incorporated with ₹1,00,000 paid-up capital. Each one must deposit ₹50,000 into the company’s current account. Only after both transfers appear on the bank statement can you attach that statement to INC-20A and certify it.

    This is why opening the company’s current account immediately after incorporation — not weeks later — is so critical. Don’t wait for your accountant to remind you.

    Need help with the full incorporation and post-incorporation compliance checklist? The Lawizer business legal services page covers everything from SPICe+ filing to post-registration steps like INC-20A, GST registration, and MSME enrolment.

    Documents Required for INC-20A Filing

    Filing INC-20A on the MCA21 Version 3 portal is straightforward once you have all your documents in order. Here’s everything you’ll need:

    • Company Bank Statement — showing all credit entries, specifically the receipt of subscription money from each shareholder. This is the most critical document.
    • Photographs of the Registered Office — one showing the external building and one showing the interior of the office, with at least one Director or KMP (Key Managerial Personnel) visible in the photo.
    • Board Resolution — authorising a specific director to file the INC-20A form on behalf of the company.
    • Proof of regulatory approval — required only if your company’s business is regulated by RBI, SEBI, IRDAI, or another sectoral body.
    • Digital Signature Certificate (DSC) — of the director who will be signing and submitting the form on the MCA21 portal.

    The form itself must be certified by a practising CA, CS, or Cost Accountant before it’s uploaded. Once submitted, the MCA typically processes it and issues acknowledgement. There’s no separate “certificate” issued — successful filing and its SRN (Service Request Number) confirmation is your proof of compliance.

    Incorporation Compliance Checklist India | Complete Guide

    The 180-Day Deadline and What Happens If You Miss It

    The deadline is firm: INC-20A must be filed within 180 days from the date of incorporation. So if your company was incorporated on 1st January 2025, the last date to file INC-20A is 30th June 2025.

    The MCA’s e-filing portal accepts INC-20A filings throughout this window, and it’s strongly advisable to file well before the last 30 days.

    The short answer on penalties: they’re steep and they escalate. Here’s exactly what non-compliance triggers under Section 10A of the Companies Act, 2013:

    • Penalty on the company: ₹50,000 (one-time flat penalty)
    • Penalty on every officer in default (each director who was responsible): ₹1,000 per day for every day the default continues, capped at ₹1,00,000 per officer
    • Company strike-off: If the Registrar of Companies (RoC) has reasonable cause to believe the company is inactive — no bank account, no assets, no business — it can initiate action to remove the company’s name from the Register of Companies entirely

    These aren’t theoretical. The MCA has actively penalised companies for non-compliance — in one documented case, the RoC Hyderabad imposed a total penalty of ₹2.5 lakh on a company and its directors for failing to file INC-20A.

    Directors must pay penalties from their personal income, not company funds. That’s a personal financial hit that no early-stage founder should have to absorb for a form that takes a few days to file correctly.

    If your company has already missed the deadline, there’s still a path forward. Late filing is accepted on the MCA portal with additional fees, and in some cases, founders can file a condonation application explaining the reasons for delay. But do not wait. Each additional day adds ₹1,000 to every director’s personal liability.

    Step-by-Step: How to File INC-20A on MCA21

    Here’s the complete process, simplified for founders who want to understand what their CA or Lawizer’s team is doing on their behalf:

    • Step 1 — Open the Company’s Bank Account: Do this immediately after incorporation. Deposit the subscription amounts from all shareholders as per the MOA.
    • Step 2 — Collect Documents: Gather the bank statement, registered office photographs, board resolution, and director DSC.
    • Step 3 — Download the Form: Log into the MCA21 Version 3 portal using the company’s CIN and director credentials. Access the INC-20A e-form.
    • Step 4 — Fill and Certify: Complete all mandatory fields — CIN, registered office address, and the declaration. Have a practising CA, CS, or Cost Accountant digitally certify the form.
    • Step 5 — Attach and Upload: Attach all supporting documents and upload the certified form on the MCA21 portal.
    • Step 6 — Pay Fees and Get SRN: Pay the prescribed filing fee online. The portal generates an SRN (Service Request Number) as proof of submission. Save this.

    Once filed successfully, your company is legally authorised to commence business operations, exercise borrowing powers, and enter into contracts. Until then — even if you’ve been operating informally — you are technically in default under the Companies Act, 2013.

    Lawizer’s compliance experts handle this entire process end-to-end, so you don’t have to track down a CA and navigate MCA21 on your own.

    INC-20A vs SPICe+: Understanding the Difference

    A lot of founders confuse INC-20A with SPICe+. They’re entirely different. SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) is the form you file to incorporate your company — it’s the form through which MCA assigns your CIN and issues your Certificate of Incorporation. INC-20A is the form you file after incorporation, to declare that business can now commence.

    Think of it this way: SPICe+ is the birth certificate of your company. INC-20A is the clearance certificate that says your company is funded, operational, and ready to engage with the world. You need both.

    One without the other leaves your company legally incomplete for business purposes. If you’re also planning to register for MSME Udyam registration or GST, those processes can run in parallel with INC-20A — but don’t start billing clients until INC-20A is filed and confirmed.

    Frequently Asked Questions

    Q: Is INC-20A mandatory for all private limited companies in India?

    A: Yes, INC-20A is mandatory for every company incorporated in India on or after 2nd November 2018 that has a share capital. This includes Private Limited Companies, Public Limited Companies, and One Person Companies (OPCs). Companies incorporated before that date, companies without share capital (like Section 8 non-profits), LLPs, and partnership firms are not required to file this form.

    Q: What is the deadline to file INC-20A after company incorporation?

    A: INC-20A must be filed within 180 days from the date of incorporation of the company. For example, if your company was incorporated on 1st January 2025, the deadline to file INC-20A is 30th June 2025. Missing this deadline attracts a ₹50,000 penalty on the company and ₹1,000 per day on each defaulting director, up to a maximum of ₹1,00,000 per officer.

    Q: Can my company start business before filing INC-20A?

    A: No. Under Section 10A of the Companies Act, 2013, a company cannot commence any business activity or exercise any borrowing powers until INC-20A has been filed with the Registrar of Companies (RoC). Operating without filing INC-20A makes the company and its directors liable to penalties, and the Registrar can initiate proceedings to strike off the company’s name from the register.

    Q: What documents are needed to file Form INC-20A?

    A: To file INC-20A, you’ll need the company’s bank statement showing receipt of subscription money from all shareholders, photographs of the registered office (exterior and interior with a director or KMP visible), a board resolution authorising the filing, and the Director’s Digital Signature Certificate (DSC). The form must be certified by a practising Chartered Accountant, Company Secretary, or Cost Accountant before submission on the MCA21 portal.

    Q: What happens if INC-20A is not filed within 180 days?

    A: If INC-20A is not filed within 180 days of incorporation, the company faces a flat penalty of ₹50,000. Each director in default is additionally liable to pay ₹1,000 per day of continued non-compliance, up to ₹1,00,000 per director — and this penalty must be paid from personal funds, not company accounts. In serious cases, the Registrar of Companies can also initiate action to strike off the company’s name from the Register of Companies entirely.

    Q: Who certifies the INC-20A form before filing?

    A: Form INC-20A must be verified and certified by a practising professional — either a Chartered Accountant (CA), Company Secretary (CS), or Cost Accountant — before it is uploaded to the MCA21 portal. Directors cannot self-certify this form. The certifying professional confirms that the information provided, including the proof of share capital receipt, is accurate and complete.

    Q: Does INC-20A need to be filed every year?

    A: No, INC-20A is a one-time filing. It is required only once, immediately after incorporation and before the company commences business. It is not an annual compliance requirement. However, companies must continue to file their annual returns, financial statements, and other periodic MCA forms as required under the Companies Act, 2013.

    Ready to file INC-20A and get your company legally operational?
    Lawizer’s experts handle everything — INC-20A filing, post-incorporation compliance, GST registration, and MSME Udyam enrolment — fully online, starting at just ₹999. No CA visit needed.

    Start Your INC-20A Filing with Lawizer →