The registration of a private limited company is done through a stipulated fee that is paid to the government in India. But the costs do not stop with the registration and there are a number of other expenses incurred while carrying out a business through a private limited company.
The first step in setting up a business, whether large or small, is evolving a company to carry out the business activities. A private limited company is one of the most viable options available to entrepreneurs to commence their business establishments. Incorporating a company is the first step in carrying out a successful business. The concept of the private limited company was evolved under the Companies Act, 2013 and the Companies Incorporation Rules, 2014. The ministry of corporate affairs governs the private companies formed under this Act.
Private Limited Company Registration Government Fee:
Setting up a private limited company could open a new arena of opportunities to its owner. But nothing worthy ever comes for free. Therefore, to set up a company, a specified fee is required. An overall outlook of the registration process might seem as though the incorporation of a company is quite sophisticated and also that the private limited company registration fees are quite exorbitant. This has been one of the prime reasons for the entrepreneurs to look into setting up other corporate entities like LLP.
Earlier, the fee for registering the company was largely dependent on the share capital with which the private limited company operates. On January 26th 2019, the Government had waived the Government fee for the incorporation of private companies in India. Hence, currently, the minimum share capital is no longer a deciding factor in the registration fee of the company. This would also imply that the fee is now comparatively lesser after the remarkable move made by the government.
The cost for incorporation of a private limited company alone would be close to ₹30,000/-. This is again dependent on a number of factors like the number of members and the directors in the company, the authorised share capital of the firm, stamp duty of the state where the company is being registered, and also the professional fee involved in getting the company registered. Here again, the professional fee differs from a case-to-case basis depending upon the company that is being registered.
Ancillary Registration Costs:
Irrespective of the type of company that is being incorporated, every company has a couple of mandatory government registrations to be carried out, like that of the GST registration. If the company to be registered is dealing with imports and exports, then IEC registration is compulsory. If the company to be registered is run by professionals, then professional tax is to be paid and EPF registration also has to be executed. In the case of small companies, MSME registration is to be carried out to reap the tax benefits. Hence, it is apparent that depending upon the type of company and the miscellaneous registrations involved, the professional charges and the government fee differs. It might hence range anywhere from ₹1500/- to ₹15000/-.
The registration of a private company would also encompass other overheads and compliances that are to be carried out mandatorily. The professional fee incurred for these will again vary from ₹2000/- to ₹20000/- . Therefore, the charges for running a private limited company do not stop with the registration. Getting a private limited company registered is just the first step to a flourishing business and thereafter it involves assenting to a number of other compliances to ensure the smooth running of the company.