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Setting Up of Business, Industrial and Labour Laws · Identifying Laws applicable to various Industries and their Initial Compliances

Initial Compliances on Incorporation of a Company

Updated 11 October 2026 · Fact-checked

Initial compliances are the steps a company must complete after receiving its certificate of incorporation. Within 30 days: verify the registered office (INC-22), hold the first board meeting and appoint the first auditor. Within 180 days: file INC-20A before starting business. Also issue share certificates within two months, open a bank account and keep statutory registers.

Understand Initial Compliances on Incorporation of a Company

A company is born on the date shown in its certificate of incorporation, issued by the Registrar under Section 7 of the Companies Act, 2013. That certificate is not the end of the work. The Act then sets short deadlines for a set of first steps. This topic is a checklist of those steps and their time limits.

Incorporation is usually filed through the integrated web form SPICE+ (INC-32), with the e-MoA (INC-33) and e-AoA (INC-34). Depending on the services chosen, one filing can also bring a PAN, TAN, DIN, and registrations such as EPFO, ESIC and GST, and a bank account. So after the certificate arrives, check which of these were already obtained and which are still pending.

The core statutory steps are these. The company must have a working registered office from the 15th day of incorporation and file a verification of it in INC-22 within 30 days (Section 12). The Board must hold its first meeting within 30 days of incorporation (Section 173). The Board must appoint the first auditor within 30 days of registration (Section 139(6)). Share certificates must reach the subscribers within two months of incorporation (Section 56). Finally, a company with share capital must file INC-20A, the declaration for commencement of business, within 180 days (Section 10A).

The reason for INC-20A is simple. The law wants proof that the subscribers have actually paid for the shares they agreed to take, and that the registered office is verified, before the company starts business or uses borrowing powers. If you remember the logic, the deadlines are easy to place: 30 days for the organisation steps, 180 days for the money and commencement step.

Other practical steps follow from these: opening a bank account, preparing statutory registers, displaying the company name at the office and on letterheads, and registering under tax and labour laws when the thresholds apply. In the exam, always link each step to its deadline, form and authority.

Key rules to remember

Registered office
Registered office from day 15; INC-22 within 30 days of incorporation
Section 12. The Registrar can inspect to verify the office. Filing INC-22 is also a condition for INC-20A.
First Board meeting
Within 30 days of the date of incorporation
Section 173(1). Notice at least 7 days, as per Section 173(3) and Secretarial Standard SS-1, unless shorter notice is validly given.
First auditor
Board appoints within 30 days of registration; if the Board fails, members appoint at an EGM within 90 days
Section 139(6). The first auditor holds office until the conclusion of the first AGM. File ADT-1 within 15 days of the appointment.
Commencement of business (INC-20A)
Declaration within 180 days of incorporation, filed in INC-20A
Section 10A. Applies to a company having share capital. A director declares that every subscriber has paid the value of shares agreed to be taken, and INC-22 must have been filed.
Penalty for default under Section 10A
Company ₹50,000; each officer in default ₹1,000 per day, up to ₹1,00,000
The Registrar may also begin removal of the company name under Section 248 if there is reason to believe the company is not carrying on business.
Share certificates to subscribers
Within 2 months of incorporation
Section 56. Subscribers to the memorandum hold their shares from incorporation; the certificate is evidence of title.
Director disclosures at first meeting
MBP-1 (Section 184) and DIR-8 (non-disqualification)
Each director discloses interest in other entities and confirms he is not disqualified under Section 164.

How to solve Initial Compliances on Incorporation of a Company questions

Use this order for any question on post-incorporation compliances. It works for list-type, date-based and consequence-based questions.

  1. 1Read the question and fix the date of incorporation. Every deadline runs from it.
  2. 2Identify the type of company: private or public, with or without share capital, one person company, Section 8 company. This decides whether INC-20A and certain registrations apply.
  3. 3List the compliances in time order: registered office (day 15 and INC-22 in 30 days), first Board meeting (30 days), first auditor (30 days), share certificates (2 months), INC-20A (180 days).
  4. 4For each item, name the provision, form and authority: for example Section 139(6), ADT-1, Registrar of Companies.
  5. 5Add practical steps if asked: bank account, statutory registers, name display, PAN/TAN, GST, EPFO, ESIC and shop registration as applicable.
  6. 6If the question is about default, state the consequence: penalty under Section 10A, or the power of the Registrar to remove the name.
  7. 7Close with a clear conclusion that answers the exact question asked, with the date or the legal position.

Quickest way: The 30-30-30-180 checklist

When to use it: Use it for short notes, list questions and date-calculation questions when time is tight.

  1. Write the date of incorporation at the top.
  2. Write three items due in 30 days: INC-22, first Board meeting, first auditor.
  3. Write the 2-month item: share certificates.
  4. Write the 180-day item: INC-20A, with the paid-up share condition.
  5. Add one line each on bank account, registers and registrations.
  6. Add one line on the consequence of default and finish.

Common mistakes in Initial Compliances on Incorporation of a Company

  • Saying INC-20A is due in 30 days.

    Students mix it up with the other 30-day items such as INC-22 and the first auditor.

    Fix: Link INC-20A with 180 days and Section 10A. Remember that 30 days is for organisation steps and 180 days is for share money and commencement.

  • Forgetting that the first auditor is appointed by the Board, not the shareholders.

    Students apply the rule for later auditors, who are appointed at the AGM.

    Fix: For the first auditor, the Board acts within 30 days. Only if the Board fails do members appoint at an EGM within 90 days. The auditor serves until the first AGM.

  • Treating the first Board meeting as having no fixed time limit.

    Students remember the rule of four meetings a year with a gap of not more than 120 days, but not the special rule for the first meeting.

    Fix: State Section 173(1): the first meeting is within 30 days of incorporation.

  • Omitting the INC-22 condition for INC-20A.

    Students focus only on the subscribers' payment of share money.

    Fix: Say that INC-20A needs both: subscribers have paid for their shares, and INC-22 verification of the registered office has been filed.

  • Applying INC-20A to every company.

    The form is taught as a general step after incorporation.

    Fix: Section 10A applies to a company having share capital. State this condition in your answer.

  • Writing an agenda without the director disclosure and non-disqualification items.

    Students list only appointments and the bank account.

    Fix: Always include noting the certificate of incorporation, MoA and AoA, MBP-1 and DIR-8, first auditor, bank account with signatories, and registers.

Worked examples

Example 1

Navarang Foods Private Limited, having share capital, was incorporated on 10 March 2027. State the last dates for (a) the first Board meeting, (b) appointing the first auditor by the Board, and (c) filing INC-20A. State the condition for INC-20A.

Show the solution
  1. Provision: Section 173(1) requires the first Board meeting within 30 days of incorporation. Section 139(6) requires the Board to appoint the first auditor within 30 days of registration.
  2. Calculate 30 days from 10 March 2027: 21 days take us to 31 March, and 9 more days take us to 9 April 2027. So both dates fall on 9 April 2027.
  3. Provision: Section 10A requires the declaration within 180 days of incorporation. From 10 March, 21 days reach 31 March, then April 30, May 31, June 30, July 31 and August 31 give 174 days at 31 August. Six more days give 6 September 2027.
  4. Condition: a director must declare that every subscriber to the memorandum has paid the value of the shares agreed to be taken, and the company must have filed INC-22 for verification of the registered office.
  5. Also note ADT-1 is to be filed within 15 days of the auditor's appointment.

Answer: The first Board meeting and the first auditor appointment are due by 9 April 2027. INC-20A is due by 6 September 2027, and requires payment by subscribers for their shares and prior filing of INC-22.

Example 2

Kaveri Textiles Private Limited was incorporated in July 2027. Its directors started trading in October but never filed INC-20A, as they felt the certificate of incorporation was enough. Advise them.

Show the solution
  1. Provision: Section 10A applies to a company having share capital. It must not commence business or exercise borrowing powers unless the declaration is filed within 180 days of incorporation.
  2. Analysis: A certificate of incorporation only proves the company exists. It is not proof that subscribers have paid for their shares or that the registered office is verified. Both are needed for INC-20A.
  3. Facts: The company is trading but has not filed INC-20A, and the 180-day period from July ends in January. So the directors should file it at once, after confirming subscribers have paid and INC-22 has been filed.
  4. Consequence of default: the company is liable to a penalty of ₹50,000, and each officer in default to ₹1,000 for each day the default continues, up to ₹1,00,000. If the Registrar has reasonable cause to believe the company is not carrying on business, he can begin removal of its name under Section 248.
  5. Advice: complete the pending steps, file INC-20A, and compile registers and minutes properly.

Answer: The directors are wrong. The certificate of incorporation does not replace INC-20A under Section 10A. They should file it immediately, since non-compliance attracts penalty on the company and officers in default and exposes the company to removal of its name.

Exam tips

  • Learn the deadlines as a table in your head: 15th day, 30 days, 2 months, 180 days. Many questions are simply about these time limits.
  • In a date-based question, show the calculation line by line. Marks go for the method as well as the date.
  • For a first Board meeting agenda, write a numbered list of 8 to 10 items in the order a company secretary would take them up. Add one line on why each matters.
  • Cite the Act and section next to each step, such as Section 139(6) for the first auditor and Section 10A for INC-20A. State the penalty only where you are sure of it.
  • End every answer with a clear conclusion, as ICSI expects the provision, the analysis and then the conclusion.

Practice questions from Identifying Laws applicable to various Industries and their Initial Compliances

Initial Compliances on Incorporation of a Company in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Initial Compliances on Incorporation of a Company: frequently asked questions

What are the initial compliances after incorporation of a company?

Verify the registered office by filing INC-22 within 30 days, hold the first Board meeting within 30 days, and appoint the first auditor within 30 days. Issue share certificates within two months and file INC-20A within 180 days. Also open a bank account, maintain registers and complete applicable tax and labour registrations.

What is INC-20A and who must file it?

INC-20A is the declaration for commencement of business under Section 10A. A company having share capital files it with the Registrar within 180 days of incorporation. A director declares that each subscriber has paid for the shares agreed to be taken, and the registered office must already be verified through INC-22.

What goes in the agenda of the first Board meeting after incorporation?

Elect the chairman, note the certificate of incorporation, MoA and AoA, and take on record directors' disclosures in MBP-1 and DIR-8. Then appoint the first auditor, fix the registered office, open the bank account with authorised signatories, and approve registers and share certificates. Minutes must be recorded as per SS-1.

How is the first auditor appointed within 30 days?

Under Section 139(6), the Board appoints the first auditor within 30 days of registration. If the Board does not, the members must appoint one at an extraordinary general meeting within 90 days. The auditor holds office until the first AGM, and ADT-1 is filed within 15 days of the appointment.