What is the Cost to Register a Private Limited Company in India?

For those hoping to grow their business and get formal approval, setting up a private limited company in India is a big step. Still, it’s essential to know the costs related to the filing process before starting this path. In this blog post, we will cover the many expenses you may run into starting a private limited business in India.

Definition of a Private Limited Company

A private limited company is a formal organization that gives its owners limited responsibility. Its minimum two and maximum 200 stock count reflect the fact that shares cannot be publicly sold. Among the various benefits, private limited companies have are permanent succession, separate legal identity, and the capacity to own assets and act in business.

Importance of registration

Not only is starting a private limited company a formal task, but it also makes business sense and has plenty of benefits. It gives the business official power, improves its image with investors and customers, and offers chances for growth and development. Understanding the prices can help you handle your money better and make smart choices.

The Cost of Pvt Ltd Company Registration would vary from INR 6,000/- to INR 30,000/- depending upon the No. of Directors, No. of members, authorized share capital, and Professional fees. 

Planning, Launching, and Establishing a new Business is the most crucial stage for any businessman. More importantly, the person has to be ready with all the legal requirements needed to launch the business in the market. A private limited company is a company that is privately held for small businesses. The liability of the members of a Private Limited Company is limited to the number of shares they hold respectively. Shares of Private Limited Company cannot be publicly traded. Any type of business can be set up as a private limited company – for example, a plumber, hairdresser, photographer, lawyer, dentist, accountant, or driving instructor. The owners of a private limited company are known as shareholders.

Private Limited Companies are the most dominant and popular type in the Indian Market. This type of company is specially held for small businesses. The financial obligation of the members of a Private Limited Company is fixed and completely depends on the number of shares individually held by them.

The Companies Act 2013 governs the registration process of a Private Limited Company and the Companies Incorporation Rules, 2014 in India. You need a minimum of two directors and two shareholders to register a private limited company.

The Cost to register a Private Limited Company in India/ Registration of Pvt Ltd Company would vary from INR 6,000/- to INR 30,000/- depending upon the No. of Directors, No. of members, authorized share capital, and Professional fees. Professional fees may depend upon the complexity of the task. A private limited company is required to have and maintain a minimum paid-up capital of Rs. 1 lakh. It could go higher, as prescribed by MCA, from time to time.

Registering a private limited company is not a big task if you have all the needed documents legally.  The process of registration has undergone some major changes and made very simple. Entrepreneurs who are willing to launch and establish businesses can make it hassle-free now. Just have a look at this article to clear all your doubts about the registration process, the documents required, and the cost of registering a private limited company in India.

Breakdown of Registration Costs

The cost of starting a private limited business in India is split into three key categories: government fees, professional fees, and extra expenses.

1. Government fees:

• The firm’s authorised capital units are the government prices. As of 2023, they range from ₹ 10,000 to 20,000 for a business with a licensed capital of as much as ₹ 10 lakhs and ₹20,000 for a corporation with an allowed capital of more than ₹10 lakhs.
• Extra costs might be necessary for future allowed capital growth.

2. Professional Fees:

• Hiring experts such as lawyers and certified accountants is essential for ensuring a smooth submission process and compliance with all legal criteria.
• Depending on the complexity of the case and the professionals’ understanding, the professional fees could run from ₹15,000 to ₹50,000.

3. Other Expenses:

• DSC, digital signing certificate: ₹1,000 to ₹2,500 per director.
• DIN, or director identification number, is 500 per director.
• Stamp tax changes are based on the state in which the firm is listed.
• Notary costs for each paper run around ₹500 to ₹1,000.

Additional Costs to Consider

Apart from the licensing charges, one should consider other factors as well:

1. Annual Compliance Costs:

• Noting yearly records and financial papers with the Registrar of Companies (ROC).
• Attending annual general meetings (AGMs).

2. Fees for tax registration:

• Depending on the region, goods and services tax (GST) registration runs from ₹500 to ₹5,000.
• Tax Deductions, tax Account Numbers (TAN), and Permanent Account Numbers (PAN) change from ₹one hundred to ₹1,000.

These costs are just approximative, so they might change based on your business’s particular wants and the registering place.

Fees For Filing Form For Incorporation Of The Private Limited Company In Chennai, Tamil Nadu, With RoC

The fees for registration of a private limited company depend upon the company’s authorised capital.

Digital Signature Certificate Cost for Pvt Ltd Company

As a matter of first importance, we need to apply for the DSC, i.e. advanced mark certificate. Essentially, for the DSC, you needn’t bother with any contracted bookkeeper. You can apply yourself to a lot of organizations. These organizations give you a digital signature for truly sensible estimating. For the most part, it costs between 1500/ – to 2000/ – Rupees for the 2 year validity.

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DIN Registration Cost to Register a Company

The second step is applied to the DIN Number. Noise Number i.e Director Identification Number which is assigned by the Ministry of Corporate undertakings.
For the DIN Application, the following costs are included
a) DIN Application Fee, i.e. is 500 Rupees for each DIN
b) Stamp Paper for Affidavit charges 20 Rupees for every DIN
c) Notary Charges – 50 Rupees for each DIN
d) Professional Fee which is charged by Chartered Accountant for Certifying your Application.

Name Approval Fee for Private Limited Company

Name Approval for Pvt Ltd Company Registration Fees: – Once your DIN and DSC are arranged then you need to document a structure for the name endorsement for organization enrollment. Its costs you around 1000/ – Rupees for Approval for organization enrollment. When the Name is endorsed then one organization can enlist with the same name in India so it’s additionally helpful in the LLP/Private restricted Company.

Documenting Fee of Registration Form for the Company Incorporation

Filings of Registration Forms for the Private Limited Company: – This is the last and Final Step for the Registration. During the company registration process, you have to spend a lot of money to register your organization in India. In this progression, the cost depends and exceptionally agrees on the Authorized Share capital of the organization. So you need to record a few structures, MOA, and AOA of the Company.

How to register a Private Limited company in India

Here are four important steps to start your Private Limited Company in India without any perturbation on the legal part. 

Procure Digital Signature Certificate:

The first and most important step in registering Private Limited Company is to procure the Digital Signature Certificate. This has to be done for the Personnel involved in Private Company Incorporation in India. Digital Signature Certificates or DSC are supplied by the Certifying Authority in token form and the validity of this certificate is 1 or 2 years. 

The requirement of DSCs is to fill out the e-forms on the MCA online portal for the online private company registration procedure. Subscribers and Directors are the personnel involved in the company formation. Subscribers are the company’s proposed shareholders. The said shareholders have to file e-MOA and e-AOA by attaching DSCs, and the directors shall get a Director Identification Number by filling out an online application in the following step.

List of Documents required for Digital Signature Certificate:

• Passport size photograph of the applicant;
• Address proof of the applicant (self-attested)
• PAN card of the applicant(self-attested)

Obtain Director Identification Number or DIN

Director Identification Number (DIN) is a unique number allotted by the Ministry of Corporate Affairs to the individual. It can be obtained by making an application for allotment of DIN online. This unique identification number is the permanent number for a lifetime unless it is withdrawn or surrendered.

What documents are required for the DIN application?

• Passport size photograph of the applicant;
• Address proof of the applicant (self-attested)
• PAN card of the applicant (self-attested)

Reservation of Name for the Proposed Company 

This is the step where you have to be ready with the name of the proposed company, as it has to be reserved before the company registration process. The reservation of the name of a private limited company can be made in e-Form INC – 1 by paying the required fees. You have the option of providing a maximum of 6 names in order according to your preference, along with the remarks for the proposed name(s) in the Application. Depending on the availability of the names, out of the 6 names, the Registrar may approve one or may request to give more preferred names with significance.
The application for the name is approved considering the provisions established by the Act. Here are some of the general practices followed while choosing and applying the name:

• Select a name that is easy to spell and remember
• The name should hold a distinct identity for the business
• Make it short & simple
• Avoid prohibited or public policy-violating names
• Avoid selecting a name that is similar or identical to any other company/ LLP that is already in the market.

Certificate of Incorporation in India

After reserving the name for the proposed company by applying in e-Form INC – 1, you can apply for a Certificate of Incorporation. The application for online registration for private limited companies is made by online submission of Simplified Proforma for Incorporating Company forms or SPICe forms.

Draft of MoA & AoA

MoA and AoA are contract documents for a Private Limited Company. MoA is the Memorandum of Association of a company and AoA is Articles of Association. 
MoA of the Company dictates the scope of operations, main object, and activities of the company. And AoA provides complete information on how the operations and administration shall proceed. Drafting these two documents should be done very carefully, especially after consulting the experts or professionals.
Along with the application for registration of a company in India, the Memorandum and Articles of the company have also been filed in SPICe forms. 

Check the needed documents to accompany the Application for registration 

• Utility Bill and NOC for the Registered Office address 
• If the premises is rented, then you have to submit a rental agreement with the owner of the registered office
• DIR – 2 form – consent to act as a Director of the company
• Duly franked and notarized legal document and declaration by a first subscriber(s) and director(s) in form INC – 9
• Self-attested copy of identity proof of the first subscriber(s) and director(s).

With all these required documents, the application is submitted by making the Government Fees and Stamp Duty applicable depending on the rules of that particular state. The allotment of PAN and TAN for the proposed Private Limited company is also processed using the same registration process.

Later, the Registrar will review and verify the application made for a certificate of incorporation in SPICe forms, and the Certificate of Incorporation under his seal and signature in electronic form will be issued. The Certificate of Incorporation (COI) issued will have the date of incorporation with the PAN of the proposed private limited company.

Government Fee for Company Registration Online in India

The registration fees of Private Limited Companies differ from one company to another depending on various factors like Share capital, no. of shareholders, no. of Directors, and so on.  

Fee for One Person and Small Companies in India

Let us begin with the fee structure for registration of a One Person Company and Small Company:

Fees for Companies Other Than One Person and Small Companies

I.e., Private Limited Company Registration Cost in India, Partnership Firm Registration Cost in India, LLP Registration Cost in India, Public Limited Company Registration Cost in India, Nidhi Company Registration Cost in India, Section 8 Company Registrations Cost in India & Proprietorship Registration Cost in India are listed below,

Fee for Companies without a Share Capital

For Companies with Share Capital

Conclusion

From government taxes to professional fees and other charges, starting a private limited company in India costs money. Knowing these upfront costs helps you to manage your money better and make smart choices. To guarantee a smooth filing process and comply with all legal criteria, get expert advice from qualified attorneys and professional accountants.