What Does It Cost To Start & Operate a Private Limited Company in India?

Last Updated at: May 15, 2020
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Around 100,000 of the self-employed will now be able to automatically benefitted following enhancements made to the self-Employed Person (SEP) Income Relief Scheme as part of the supplementary budget announced in the Parliament recently.

What Does It Cost To Start & Operate a Private Limited Company in India?
If you are planning to start a business, then take into consideration various costs like operational cost, running expense, inventory cost, license and permit, advertising, marketing, and research.

 

A lot of entrepreneurs do not incorporate a private limited company because they feel it will be a costly affair of. But, with the arrival of company registration procedures on online platforms, the situation has changed drastically. It is easy to understand that incorporation can be done in little time at substantially reduced pricing.

Entrepreneurs are always sceptical about starting a private limited company because of the high costs said to be associated with it. This may have been true even five years ago, but given transparent pricing the internet has brought about, a lot more new businesses can start a private limited company earlier than before. 

Indian Company Registration

In India, the Private Limited Company registration cost depends on many factors. At first authorised share capital used to be an important factor. One could register a company with it. Lately, there is no requirement for minimum share capital. The cost of registration has also reduced immensely since the Government waived off the Government fee for company incorporation from 26th January 2019.

Pvt Ltd Company registration procedure is now available on online platforms, This makes it easy to understand that incorporation can be done in little time at a lesser price. 

Browse through our articles on services provided at Vakilsearch, and just let us know if we can help you with your company registration or tax filing or trademark registration.

Browse through our articles on services provided at Vakilsearch, and just let us know if we can help you with your company registration or tax filing or trademark registration.

 

So, what are the costs attached to starting and then running a private limited company? Let’s find out.

 

  • Starting Up

  • Business Registration

  • Mandatory Compliances

  • Accounting & Auditing

  • Miscellaneous Compliances

  • Event-Based Compliances

Starting Up

The cost of company registration in India has reduced in India, as has the complexity of the procedure, with the new INC-32 procedure. Currently, it will set you back Rs. 7000 in government fees if you incorporate with the minimum authorised capital of Rs. 1 lakh (what most start-ups go with), but you’ll also need legal help from a lawyer or chartered accountant. Their charges depend on the level of expertise and experience. This is if you get it done offline. You can, however, also do this online, where incorporation fees are lower, starting at around Rs. 7000. This is all it will cost to incorporate, now that there is no minimum paid-up capital requirement.

Cost: One-time cost of around Rs. 14,000 for authorised capital of Rs. 1 lakh.

company registration with Vakilsearch

Business Registrations

This isn’t a requirement for private limited companies, per se, but all businesses in India. Each one of them requires some government registrations, based on the offering. If you offer a service, then you must charge customers service tax (for which a service tax registration is necessary) once your turnover crosses Rs. 9 lakh. Those selling goods must get VAT registration. You also need a license under the Shops & Establishments Act to open a current account, Professional Tax registration if you have employees and much else.

Cost: Expect to spend Rs. 6,000 to Rs. 30,000 per registration, though most of these are state-based taxes and can vary greatly across India.

Steps involved and Documents Required For Company Registration:

Major Steps involved in Pvt Ltd Company Registration are:

  1. Application for DSC (Digital Signature Certificate)
  2. Applying for DIN (Director Identification Number)
  3. Application to check name availability
  4. Filing EMOA and EAOA for the register private limited company
  5. Apply for PAN and TAN for the company

Some of the basic documents required for the company registration among others include

  • Administrator’s PAN Card Copy
  • Passport Size Photo Copies of the Administrator
  • Administrator’s Aadhar Card Copy
  • Rent agreement Copy (If rented property)
  • Bills for Electricity/ Water (Business Place)
  • Property Papers Copy

One who wishes to start a Pvt Ltd can apply for Name of the company, Company Incorporation, DIN of the directors, PAN and TAN for the company, all at once through an integrated e-Form SPICe.The overall procedures for starting a business in India has been made easier. This was made possible with the help of the revised reforms undertaken by the Ministry of Corporate Affairs

Mandatory Compliances

Every company must make declarations to the Ministry of Corporate Affairs from the very beginning, to communicate the hiring of an auditor, the minutes of board meetings, the annuals filings of directors and the company and much else. They don’t involve individual efforts but consumes time.

Cost: Online legal companies will do this for around Rs. 15,000 per year (inclusive of government fees), but will usually be double this at a local CS.

Accounting & Auditing

Again, it’s not just private limited companies that need to maintain their books, but let’s consider it anyway. Depending on how many entries there will be, charges will vary but expect to pay at least Rs. 2500 a month. Auditing is not mandatory for proprietorships and partnerships. but it is for private limited companies. This annual requirement will cost at least Rs. 15,000.

Cost: Minimum of Rs. 2500 a month for accounting and at least Rs. 15,000 for auditing.

Miscellaneous Compliances

The MCA keeps track of certain aspects of your business. When you make changes to any of these aspects, it needs to be informed. This includes adding or replacing of directors, moving of office, etc. These have a cost, too, of course. There will be a government and professional fee here. As a small company, you will be hiring a CS on a per-job basis, rather than full- or even part-time. It’s unlikely for you to have a need for a CS more than a few times a year, though.

Cost: Professional fees of Rs. 1500 onwards, depending on the complexity of the job.

Event-Based Compliances

These types of compliances are prompted when there is a change of registered offices, in the directors etc. Therefore, these events are tracked completely and compliances are met in order to avoid any additional penalties or other fees. Other events include an increase in authorised share capital or increase in paid-up share capital, applying for KYC for one or all directors etc.  

Cost: Professional fees of Rs. 2000 onwards, depending on the changes and the complexity of the process.

You can get your company incorporated easily with the help of an online legal service provider. You will have to pay a specific sum of money and provide some mandatory documents. Once you are done with, you will get the certificate of registration within two weeks.

 

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What Does It Cost To Start & Operate a Private Limited Company in India?

71565
If you are planning to start a business, then take into consideration various costs like operational cost, running expense, inventory cost, license and permit, advertising, marketing, and research.

 

A lot of entrepreneurs do not incorporate a private limited company because they feel it will be a costly affair of. But, with the arrival of company registration procedures on online platforms, the situation has changed drastically. It is easy to understand that incorporation can be done in little time at substantially reduced pricing.

Entrepreneurs are always sceptical about starting a private limited company because of the high costs said to be associated with it. This may have been true even five years ago, but given transparent pricing the internet has brought about, a lot more new businesses can start a private limited company earlier than before. 

Indian Company Registration

In India, the Private Limited Company registration cost depends on many factors. At first authorised share capital used to be an important factor. One could register a company with it. Lately, there is no requirement for minimum share capital. The cost of registration has also reduced immensely since the Government waived off the Government fee for company incorporation from 26th January 2019.

Pvt Ltd Company registration procedure is now available on online platforms, This makes it easy to understand that incorporation can be done in little time at a lesser price. 

Browse through our articles on services provided at Vakilsearch, and just let us know if we can help you with your company registration or tax filing or trademark registration.

Browse through our articles on services provided at Vakilsearch, and just let us know if we can help you with your company registration or tax filing or trademark registration.

 

So, what are the costs attached to starting and then running a private limited company? Let’s find out.

 

  • Starting Up

  • Business Registration

  • Mandatory Compliances

  • Accounting & Auditing

  • Miscellaneous Compliances

  • Event-Based Compliances

Starting Up

The cost of company registration in India has reduced in India, as has the complexity of the procedure, with the new INC-32 procedure. Currently, it will set you back Rs. 7000 in government fees if you incorporate with the minimum authorised capital of Rs. 1 lakh (what most start-ups go with), but you’ll also need legal help from a lawyer or chartered accountant. Their charges depend on the level of expertise and experience. This is if you get it done offline. You can, however, also do this online, where incorporation fees are lower, starting at around Rs. 7000. This is all it will cost to incorporate, now that there is no minimum paid-up capital requirement.

Cost: One-time cost of around Rs. 14,000 for authorised capital of Rs. 1 lakh.

company registration with Vakilsearch

Business Registrations

This isn’t a requirement for private limited companies, per se, but all businesses in India. Each one of them requires some government registrations, based on the offering. If you offer a service, then you must charge customers service tax (for which a service tax registration is necessary) once your turnover crosses Rs. 9 lakh. Those selling goods must get VAT registration. You also need a license under the Shops & Establishments Act to open a current account, Professional Tax registration if you have employees and much else.

Cost: Expect to spend Rs. 6,000 to Rs. 30,000 per registration, though most of these are state-based taxes and can vary greatly across India.

Steps involved and Documents Required For Company Registration:

Major Steps involved in Pvt Ltd Company Registration are:

  1. Application for DSC (Digital Signature Certificate)
  2. Applying for DIN (Director Identification Number)
  3. Application to check name availability
  4. Filing EMOA and EAOA for the register private limited company
  5. Apply for PAN and TAN for the company

Some of the basic documents required for the company registration among others include

  • Administrator’s PAN Card Copy
  • Passport Size Photo Copies of the Administrator
  • Administrator’s Aadhar Card Copy
  • Rent agreement Copy (If rented property)
  • Bills for Electricity/ Water (Business Place)
  • Property Papers Copy

One who wishes to start a Pvt Ltd can apply for Name of the company, Company Incorporation, DIN of the directors, PAN and TAN for the company, all at once through an integrated e-Form SPICe.The overall procedures for starting a business in India has been made easier. This was made possible with the help of the revised reforms undertaken by the Ministry of Corporate Affairs

Mandatory Compliances

Every company must make declarations to the Ministry of Corporate Affairs from the very beginning, to communicate the hiring of an auditor, the minutes of board meetings, the annuals filings of directors and the company and much else. They don’t involve individual efforts but consumes time.

Cost: Online legal companies will do this for around Rs. 15,000 per year (inclusive of government fees), but will usually be double this at a local CS.

Accounting & Auditing

Again, it’s not just private limited companies that need to maintain their books, but let’s consider it anyway. Depending on how many entries there will be, charges will vary but expect to pay at least Rs. 2500 a month. Auditing is not mandatory for proprietorships and partnerships. but it is for private limited companies. This annual requirement will cost at least Rs. 15,000.

Cost: Minimum of Rs. 2500 a month for accounting and at least Rs. 15,000 for auditing.

Miscellaneous Compliances

The MCA keeps track of certain aspects of your business. When you make changes to any of these aspects, it needs to be informed. This includes adding or replacing of directors, moving of office, etc. These have a cost, too, of course. There will be a government and professional fee here. As a small company, you will be hiring a CS on a per-job basis, rather than full- or even part-time. It’s unlikely for you to have a need for a CS more than a few times a year, though.

Cost: Professional fees of Rs. 1500 onwards, depending on the complexity of the job.

Event-Based Compliances

These types of compliances are prompted when there is a change of registered offices, in the directors etc. Therefore, these events are tracked completely and compliances are met in order to avoid any additional penalties or other fees. Other events include an increase in authorised share capital or increase in paid-up share capital, applying for KYC for one or all directors etc.  

Cost: Professional fees of Rs. 2000 onwards, depending on the changes and the complexity of the process.

You can get your company incorporated easily with the help of an online legal service provider. You will have to pay a specific sum of money and provide some mandatory documents. Once you are done with, you will get the certificate of registration within two weeks.

 

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