Newly incorporated companies in India must meet specific conditions, including filing INC-20A and securing unpaid subscription money, before they become eligible for strike-off, especially within the initial 180 days.
A company that has just been incorporated can sometimes find itself stuck before it really begins trading. Bank-account delays, unpaid subscription money and unfinished filings can leave the business inactive, especially where a director is based overseas and document execution takes longer than expected. In India, that can raise a narrow but important question: whether a company can be struck off while its INC-20A filing is still overdue.
Under Section 10A of the Companies Act, 2013, companies incorporated after 2 November 2018 and having share capital must file the declaration for commencement of business within 180 days. But as legal guides on Section 248 make clear, missing that deadline does not by itself mean a company can be closed. The strike-off route depends on whether the specific statutory ground has actually arisen.
That distinction matters for newly formed companies. One ground under Section 248 covers failure to start business within one year of incorporation. Another applies where a company has not carried on business for two consecutive financial years and has not sought dormant status. For delayed INC-20A cases, the most relevant route is the provision linked to unpaid subscription money and a failure to file the commencement declaration within 180 days.
A company that is only about 146 days old is too early to rely on that 180-day ground. At that stage, the deadline for INC-20A has not yet passed, and the separate one-year non-commencement ground has also not matured. In practical terms, the company must wait until the relevant legal condition exists before asking for removal of its name.
The role of subscription money is central. Section 248’s 180-day ground is not triggered by a late INC-20A filing alone. It depends on two things happening together: the subscribers have not paid the money they promised at incorporation, and the declaration under Section 10A remains unfiled after the prescribed period. If the shares have already been paid up, a delayed filing does not automatically create strike-off eligibility.
Operational problems can feed into that position. Some companies struggle to open a bank account because of KYC checks, missing paperwork or the need for signatures from a foreign director. That can delay receipt of subscription funds and, in turn, delay INC-20A. Even so, banking difficulty is not, on its own, a separate legal basis for strike-off.
A foreign director does not prevent strike-off, but it can make the paperwork more cumbersome. Documents signed outside India may need notarisation, apostille or consularisation, depending on where they are executed. The company must still ensure that Form STK-2 is properly completed and that the authorised signatory can meet the execution requirements.
Before filing STK-2, the company must clear liabilities, secure the required member approval and check whether any Section 249 restriction applies. Legal commentary on the strike-off process notes that certain recent activities, pending compromise arrangements or winding-up proceedings can bar a voluntary application. Companies must also ensure that overdue annual returns and financial statements are filed where required, and that there is no unsatisfied charge.
The practical point is simple: delayed INC-20A does not create an automatic right to close a company. Eligibility depends on timing, unpaid subscription money, business activity and the precise ground under Section 248. For a company still within its first 180 days, the better course may be to regularise compliance first. Once the statutory period has passed, and if the conditions are met, strike-off can be considered alongside the required approvals and filings.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
