cost of private limited company registration
Cost of Registering a Private Limited Company in India: A Comprehensive Guide
Introduction:
Registering a Private Limited Company in India is a crucial step towards establishing a legally recognized business entity. However, before embarking on this journey, it is essential to have a clear understanding of the costs involved. In this article, we will delve into the intricacies of the process and provide an in-depth analysis of the expenses associated with registering a private limited company in India.
Legal and Professional Fees:
When registering a private limited company, engaging legal and professional services is vital to ensure compliance with Indian law. The costs associated with these services can vary, depending on the complexity of the registration process, the scope of legal assistance required, and the reputation of the professionals engaged. On average, legal and professional fees for registration range from INR 15,000 to INR 30,000.
Name Reservation and Approval:
Selecting a unique and appropriate name for your private limited company is crucial. In India, the name reservation and approval process is conducted by the Registrar of Companies (ROC) through the Ministry of Corporate Affairs (MCA). The cost for name reservation and approval is INR 1,000.
Incorporation Fees:
To legally establish a private limited company in India, incorporation fees must be paid. The fees are determined based on the authorized share capital of the company. The slab rates for incorporation fees are as follows:
1. Authorized Share Capital up to INR 1,00,000: INR 500
2. Authorized Share Capital between INR 1,00,000 – INR 5,00,000: INR 2,000
3. Authorized Share Capital between INR 5,00,000 – INR 50,00,000: INR 4,000
4. Authorized Share Capital between INR 50,00,000 – INR 1,00,00,000: INR 6,000
5. Authorized Share Capital exceeding INR 1,00,00,000: INR 7,000
Stamp Duty:
Stamp duty is an important cost component while registering a private limited company in India. It is levied on the authorized share capital of the company. The stamp duty rates vary from state to state and are calculated as a percentage of the authorized capital. However, as a general reference, stamp duty can range from 0.15% to 0.5% of the authorized share capital of the company.
Registrar of Companies (ROC) Fees:
To complete the registration process, specific documents and forms must be filed with the Registrar of Companies (ROC). The ROC charges fees based on the authorized share capital of the company, as follows:
1. Authorized Share Capital up to INR 1,00,000: INR 2,000
2. Authorized Share Capital between INR 1,00,000 – INR 5,00,000: INR 2,500
3. Authorized Share Capital between INR 5,00,000 – INR 25,00,000: INR 5,000
4. Authorized Share Capital between INR 25,00,000 – INR 1,00,00,000: INR 10,000
5. Authorized Share Capital exceeding INR 1,00,00,000: INR 20,000
PAN and TAN Application:
Every Indian private limited company must obtain a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). The PAN facilitates various financial and tax-related activities, while the TAN is necessary for tax deduction and collection. The fees for PAN and TAN applications are INR 107 and INR 65, respectively.
Other associated expenses:
Apart from the aforementioned costs, there may be additional expenses such as notary fees, photocopy charges, courier charges, and other miscellaneous expenses that may vary based on the location and nature of the private limited company being registered. These costs can approximately range from INR 2,000 to INR 5,000.
Conclusion:
Registering a private limited company in India involves various costs, including legal and professional fees, name reservation and approval charges, incorporation fees, stamp duty, ROC fees, and PAN and TAN application fees. It is crucial for entrepreneurs to keep these costs in mind while planning their business ventures. By understanding the expenses involved, entrepreneurs can make informed decisions and ensure a smooth registration process for their private limited company.,
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cost of private limited company registration
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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