Your Certificate of Incorporation, company PAN and TAN prove the company exists, but at this point it owns nothing. The capital your founders promised in the Memorandum of Association is still sitting in personal accounts. Before your company can legally begin trading or borrow money, you must open a bank account, collect that promised capital, and declare it to the Registrar using Form INC-20A. This lesson walks you through those three linked steps in the order you will actually do them.
Step 1: Open the company current account
A company cannot use a founder's personal or savings account for its money. It needs its own current account, opened in the exact registered name of the company. Any scheduled bank will do, and several banks and fintech platforms now offer largely online onboarding, though most still require in-person verification of at least one director. Keep this document set ready, since it maps directly to RBI's KYC norms:
- Certificate of Incorporation issued by the MCA.
- Memorandum and Articles of Association (MOA and AOA).
- Company PAN card. No bank will open the account without it.
- Board resolution authorising the account and naming the authorised signatories.
- KYC of directors and signatories: PAN, Aadhaar, and passport-size photographs.
- Registered office address proof, such as a rent agreement or ownership deed with a recent utility bill.
Opening usually takes two to five working days once the file is complete.
Step 2: Fund the subscribed capital
Look at the subscriber sheet at the end of your MOA. Each founder signed against a number of shares. The rupee value of those shares is that person's subscribed capital, and it is now a legal obligation, not an intention. For example, if a founder subscribed to 5,000 equity shares of Rs 10 each, that founder must bring in Rs 50,000. Add up every subscriber and you get the paid-up capital the company must actually hold.
Two rules matter here. First, each subscriber must transfer their own amount from their own bank account into the company current account. One founder paying on behalf of another breaks the audit trail and creates problems later. Second, use banking channels, NEFT, RTGS, cheque or UPI, so every rupee is traceable to a named subscriber. Avoid cash. Section 10A of the Companies Act, 2013 requires that this money be paid in before the company commences business.
Step 3: File Form INC-20A
Once every subscriber's money has landed, download a bank statement that clearly shows each subscriber's name and the credited amount. This statement is the core attachment for Form INC-20A, the Declaration of Commencement of Business, filed on the MCA V3 portal. Key facts to remember:
- It applies to every company with share capital incorporated on or after 2 November 2018.
- It must be filed within 180 days of the date of incorporation.
- A director digitally signs it, and it must be certified by a practising CA, CS or CMA.
- Until it is filed, the company cannot legally commence business or borrow.
Why the deadline is not optional
Missing the 180-day window is expensive. The company faces a penalty of Rs 50,000, and every director in default is liable for Rs 1,000 per day, capped at Rs 1,00,000 per director. The Registrar can also move to strike off a company that never files. Treat INC-20A as the final gate of incorporation rather than a later chore.
Practical tips
- Open the account and transfer the capital in the first few weeks, not on day 179.
- Make sure each transfer amount matches the MOA figure exactly, to the rupee.
- Ask subscribers to add a reference note like "share subscription" on the transfer.
- Keep the certified INC-20A acknowledgement safely, since investors and banks will ask for it during due diligence.