Cost Of Registering A Pvt Ltd Company: Government Fee and Registration Costs for Private Limited Company

Registering a private limited company in India involves paying a prescribed fee to the government including stamp duty. However, the financial obligations extend beyond registration, as there are various additional expenses associated with operating a business through a private limited company.

Initiating a business, regardless of its scale, begins with the establishment of a company to conduct its activities. Opting for a Private Limited Company is a highly practical choice for entrepreneurs launching their business ventures. The process of incorporation marks the initial phase in the successful operation of a business. The Private Limited Company framework was introduced under the Companies Act of 2013 and the Companies Incorporation Rules of 2014. Private companies formed under this legislation fall under the jurisdiction of the Ministry of Corporate Affairs. Continue reading to learn about the expenses associated with a Private Limited Company.

Private Limited Company Registration Government Fee:

Establishing a private limited company can unlock a host of opportunities for its owner, but worthwhile endeavors typically come with associated costs. To initiate the company formation process, a specified fee is obligatory. At first glance, the registration process might appear intricate, and the registration fees for a Private Limited Company may seem high. This perception has prompted entrepreneurs to explore alternative corporate structures like LLP.

Previously, the registration fee for a company was largely contingent on the Authorized Share Capital underpinning the private limited company’s operations. However, on January 26th, 2019, the government waived the incorporation fee for private companies in India. Consequently, the minimum share capital no longer plays a determining role in the registration fee. This also implies that the fee is now comparatively lower, thanks to the government’s noteworthy initiative. Setting up a Private Limited Company (Pvt Ltd) may incur expenses totaling around ₹10,000/-. However, this amount depends on several factors, including the number of members and directors in the company, the authorized share capital, the applicable stamp duty in the state of registration, and the professional fees involved in the registration process. It’s crucial to emphasize that the professional fees vary on a case-by-case basis, reflecting the specific details and requirements of the company undergoing registration.

Ancillary Registration Costs Registering a Pvt Ltd Company:

Regardless of the type of company being incorporated, every company must undertake several mandatory government registrations, such as GST registration. If the company deals with imports and exports, it must compulsorily undergo IEC registration. Professional tax and EPF registration are obligatory for companies run by professionals. Small companies must obtain MSME registration to avail tax benefits. To avail the benefits of Startup India initiative of government of India, a pvt ltd company have to register itself with DPIIT. Consequently, it is evident that professional charges and government fees vary depending on the type of company and the miscellaneous registrations involved. This range might therefore extend from ₹1500/- to ₹10000/-.

In addition to the registration process, a private company also involves other mandatory overheads and compliances like GST Returns, TDS Returns, ROC Compliances, Audit etc.. The professional fees for these requirements can range from ₹2000/- to ₹30000/-. Thus, the costs associated with operating a private limited company extend beyond the initial registration. Registering a private limited company marks the initial phase of establishing a thriving business, followed by the need to adhere to various compliances to ensure the company’s smooth operation.

Summary – Cost of Registering a Pvt Ltd Company