How Much Does It Cost to Register a Private Limited Company in India?
A private limited company is a business entity that offers limited liability protection to its shareholders, which means its assets are separate from the company’s liabilities. It is a popular choice for startups and medium-sized businesses due to its numerous advantages, such as access to funding, perpetual existence, and better credibility in the market.
The Process of Registering a Private Limited Company in India
Registering a private limited company in India involves several steps, and we’ll outline them for you below:
Step 1: Obtaining Digital Signature Certificate (DSC)
The first step in the registration process is obtaining a Digital Signature Certificate (DSC). The DSC is an electronic signature and is required to file various company registration documents online.
Step 2: Obtaining Director Identification Number (DIN)
The next step is to obtain a Director Identification Number (DIN) for all the proposed directors of the company. The DIN can be obtained by filing an online application with the Ministry of Corporate Affairs (MCA).
Step 3: Name Reservation
Choosing the right name for your company is crucial. You need to ensure that the name is unique, not already in use, and complies with the naming guidelines set by the MCA. Once you have selected a name, you can apply for a name reservation through the RUN (Reserve Unique Name) service.
Step 4: Drafting the Memorandum of Association (MOA) and Articles of Association (AOA)
The MOA and AOA are the two vital documents defining the company’s constitution and rules and regulations. These documents need to be drafted carefully and must be stamped and filed with the Registrar of Companies (ROC).
Step 5: Filing for Incorporation
After obtaining the DSC and DIN and having the MOA and AOA ready, you can proceed with filing the incorporation documents with the ROC. The documents include Form SPICe (Simplified Proforma for Incorporating Company Electronically) and Form AGILE (Application for Goods and Services Tax Identification Number, Employee State Insurance Corporation Registration, and Employees’ Provident Fund Organization Registration).
Step 6: PAN and TAN Application
Once the company is registered, you must apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) with the Income Tax Department.
Cost Breakdown for Registering a Private Limited Company in India
Understanding the cost involved is crucial if you plan to register a private limited company in India. This article provides a comprehensive breakdown of the expenses you can expect during the registration process. Please note that these charges may vary from state to state, but this will give you an approximate idea of the expenses involved.
1. Director Identification Number (DIN) for 2 Directors
| Sr. No | Particulars | Calculation | Amount is Rs. |
|---|---|---|---|
| 1 | DIN for 2 Directors | Rs. 500 per DIN | 1000.00 |
The first step is to obtain a Director Identification Number (DIN) for the company’s two directors. The cost is Rs. 500 per DIN, totalling Rs. 1000.
2. Digital Signature Certificate (DSC) for 2 Directors
| Sr. No | Particulars | Calculation | Amount is Rs. |
|---|---|---|---|
| 2 | The amount is Rs. | Rs. 1500 per DSC | 3000.00 |
A Digital Signature Certificate (DSC) is required for filing documents online. The cost for obtaining DSCs for two directors is Rs. 1500 each, totalling Rs. 3000.
3. Company Name Approval
| Sr. No | Particulars | Calculation | Amount is Rs. |
|---|---|---|---|
| 3 | Company name approval | Rs. 1000 per application | 1,000.00 |
Choosing the right company name is important; the approval process costs Rs. 1000 per application.
4. Stamp Papers and Notary Charges
| Sr. No | Particulars | Calculation | Amount is Rs. |
|---|---|---|---|
| 4 | Stamp Papers and notary charges | Depends on affidavits, certifications, etc. | 500 (approx) |
Stamp papers and notary charges depend on the number of affidavits, certifications, and declarations required. An approximate cost for two directors is Rs. 500.
5. Company Registration
The company registration process involves several steps, and here’s the cost breakdown:
| Sr. No | Particulars | Calculation | Amount is Rs. |
|---|---|---|---|
| I | Filling of form INC 7 | Rs. 300.00 | |
| II | MOA | Rs. 2000.00 | |
| III | AOA | Rs. 300.00 | |
| IV | Form INC 22 | Rs. 300.00 | |
| V | Form DIR 12 | Rs. 300.00 | |
| Total | Company Registration Cost | 3,200.00 |
The total cost for company registration, including Form INC 7, MOA, AOA, Form INC 22, and Form DIR 12, is Rs. 3,200.
6. Stamp Duty Charges for MOA, AOA, and Form INC 7
| Sr. No | Particulars | Amount is Rs. |
|---|---|---|
| 6 | Stamp Duty Charges for MOA, AOA, and Form INC 7 | 700 Avg. |
The stamp duty charges vary from state to state, and the average cost is Rs. 700.
Total Government Cost of Company Registration
After summing up all the government costs involved in registering a private limited company, we get the following:
| Particulars | Amount is Rs. |
|---|---|
| Total Government Cost of Registration | 9,400.00 |
Please note that the abovementioned charges only provide an idea about the expenses and levies required, excluding professional charges, which may vary based on location and individual requirements.
Conclusion
In conclusion, registering a private limited company in India involves several steps and costs. It is essential to carefully plan and budget for the registration process to ensure a smooth and hassle-free experience. The Pvt ltd registration cost depends on various factors, and it is advisable to consult a professional for accurate estimates.
