private limited company registration cost
All You Need to Know About Private Limited Company Registration in India
Introduction:
Setting up a private limited company in India requires going through a strict and legally defined registration process. As one of the most popular business structures, private limited companies offer numerous advantages, including limited liability and the ability to raise funds. However, understanding the costs associated with private limited company registration is crucial for aspiring entrepreneurs in India.
Article:
Private Limited Company Registration in India:
Private limited company registration is regulated by the Companies Act, 2013, in India. This process is overseen by the Ministry of Corporate Affairs (MCA) and involves several steps and formalities to ensure compliance with legal requirements. The key benefits of starting a private limited company in India are that it provides a separate legal identity for the business and protects the personal assets of the shareholders in case of any liabilities.
Costs Involved in Private Limited Company Registration:
1. Name Approval Fee:
Before registering a private limited company, you need to obtain approval for your chosen company name from the MCA. The name approval fee varies depending on the proposed name and ranges between INR 1,000 to INR 2,000. This fee is non-refundable in case of rejection.
2. Digital Signature Certificate (DSC):
A digital signature certificate is required for online transactions and e-filing with various government departments. Obtaining a DSC involves a cost of approximately INR 1,500 to INR 2,000 per director.
3. Director Identification Number (DIN):
Each director of the private limited company must possess a unique Director Identification Number (DIN), which can be obtained by filing an e-Form with the MCA. The application fee for DIN is approximately INR 500.
4. Incorporation Fee:
The incorporation fee is payable to the Registrar of Companies (RoC) and is based on the authorized capital of the company. For companies with an authorized capital of up to INR 1 lakh, the fee is around INR 5,000. For companies with an authorized capital between INR 1-10 lakh, the fee ranges between INR 2000-3000, and so on.
5. Stamp Duty:
Stamp duty is levied on the authorized capital mentioned in the Memorandum of Association (MoA) during the registration process. The rates vary from one Indian state to another, ranging between 0.15% to 0.25% of the authorized capital.
6. Professional Fee:
To ensure a smooth registration process without any legal discrepancies, many entrepreneurs seek professional assistance from company secretaries or chartered accountants. The professional fees charged for their services typically range between INR 10,000 to INR 20,000.
Post-Registration Costs:
1. Pan Card and TAN:
After company registration, it is necessary to obtain a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the company, which incur additional fees of approximately INR 110 and INR 65, respectively.
2. Annual Compliance Cost:
Every private limited company in India must comply with various annual statutory requirements, such as filing audited financial statements, annual returns, and holding annual general meetings. The cost involved in fulfilling these compliance requirements depends on the company’s turnover, size, and nature of the business.
Conclusion:
Forming a private limited company in India offers plenty of benefits, such as liability protection and the ability to raise funds for business growth. While the costs involved in the registration process may seem daunting, they are essential for legal compliance and the smooth functioning of the company. Being aware of the various expenses, from name approval fees to post-registration compliance, ensures that aspiring entrepreneurs can plan their budgets effectively and embark on their entrepreneurial journeys with confidence.,
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private limited company registration cost
This article is only published for informational purposes. Please consult your Chartered Accountant or Financial Advisor before making any important financial decisions.
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