cost of registration of private limited company in india
Cost of Registration of Private Limited Company in India: A Comprehensive Guide for Indian Entrepreneurs
Introduction:
Setting up a private limited company in India can be an exciting and rewarding journey for aspiring entrepreneurs. It not only offers the advantages of limited liability and enhanced credibility but also paves the way for potential growth and expansion. However, before embarking on this entrepreneurial path, it is vital to have a clear understanding of the costs involved in registering a private limited company in India. This article aims to provide a comprehensive guide on the anticipated expenses, outlining the registration process, associated fees, and additional requirements for Indian entrepreneurs.
The Registration Process:
1. Obtaining Digital Signatures:
The initial step towards registering a private limited company requires obtaining a digital signature certificate (DSC) for the proposed directors. A DSC acts as an electronic identification of the company’s directors and authentication tool for online filings. The approximate cost of obtaining DSCs can range from INR 1,000 to INR 2,500 per person.
2. Obtaining Director Identification Number (DIN):
The next step involves obtaining Director Identification Numbers (DINs) for all the proposed directors. DIN is a unique identification number provided by the Ministry of Corporate Affairs (MCA). The approximate cost of obtaining DIN is INR 500 per person.
3. Name Reservation:
Choosing an appropriate name for your company is crucial. The name should comply with the Companies Act, 2013, and should not infringe any existing trademark or copyright. The cost of reserving the company’s name is approximately INR 1,000.
4. Preparation of Incorporation Documents:
After obtaining DSCs, DINs, and reserving the name, the next step involves drafting the Memorandum of Association (MoA) and Articles of Association (AoA). These documents outline the company’s objectives, shareholding pattern, rules, and regulations. The cost of preparing these documents can vary, ranging from INR 3,000 to INR 10,000, depending on the complexity and assistance required.
5. Filing Fees:
Once the incorporation documents are ready, they need to be filed with the Registrar of Companies (ROC) for approval. The fees for filing the incorporation documents depend on the authorized share capital of the proposed company. The approximate filing fees range as follows:
– For an authorized share capital up to INR 1 lakh: INR 2,000
– For an authorized share capital between INR 1 lakh and INR 5 lakhs: INR 2,000 + INR 200 for every INR 10,000 or part thereof (subject to a maximum of INR 5,00,000)
– For an authorized share capital of more than INR 5 lakhs: INR 5,00,000 + INR 300 for every INR 10,000 or part thereof (subject to a maximum of INR 50,00,000)
Additional Costs:
1. Stamp Duty:
Stamp duty is applicable for certain states during the incorporation process. The rate of stamp duty can vary, typically ranging from 0.1% to 1% of the authorized share capital.
2. Professional Fees:
Hiring professional services, such as a company secretary, lawyer, or chartered accountant, to assist with the registration process, can incur additional costs. These fees generally range from INR 10,000 to INR 25,000, depending on the level of expertise required and the complexity of the company structure.
Conclusion:
Establishing a private limited company in India involves meticulous planning and being aware of the costs associated with the registration process. As an Indian entrepreneur, understanding the approximate expenses for obtaining digital signatures, DINs, name reservation, drafting incorporation documents, filing fees, and additional costs like stamp duty and professional fees will help you plan your initial budget efficiently. Remember, while the costs mentioned here serve as a general guideline, it is advisable to consult professionals or visit the official MCA website for the most accurate and up-to-date information.,
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cost of registration of private limited company in india
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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