How much does It Cost to start a Private Limited Company?

Starting a private limited company in India involves several legal and financial considerations. One crucial aspect that entrepreneurs must plan for is the cost associated with establishing and registering a private limited company. In this article, we will explore the various expenses involved in starting a private limited company in India.

1. Registration Fees: The first step towards setting up a private limited company in India is registering with the Registrar of Companies (ROC). The registration fees vary based on the authorized share capital of the company. For instance, if the authorized share capital is up to INR 1 lakh, the registration fee is INR 5,000. However, for authorized share capital ranging from INR 1 lakh to INR 5 lakhs, the fee increases to INR 10,000. The registration fee is typically the largest expense when starting a private limited company.
2. Incorporation Documents: To register a private limited company, certain essential documents must be prepared, including the Memorandum of Association (MOA) and Articles of Association (AOA). The cost of drafting these documents can vary, depending on whether you engage a professional service provider or a company secretary to assist you. On average, the cost for drafting the MOA and AOA can range from INR 2,000 to INR 3,000.
3. Professional Fees: Engaging professionals such as a chartered accountant or a company secretary is crucial during the company registration process. These professionals can guide you through legal and financial requirements. Their fees can vary based on factors such as the complexity of the incorporation process, geographical location, and experience. Generally, professional fees for starting a private limited company in India can range from INR 10,000 to INR 15,000.
4. Stamp Duty and Notary Charges: Stamp duty and notary charges are levied on certain incorporation documents. The rates for stamp duty vary across states in India. The cost is typically calculated as a percentage of the authorized share capital or the total value of the assets mentioned in the documents. On average, the stamp duty and notary charges can range from INR 2,000 to INR 10,000, depending on the state where the company is registered.
5. Other Expenses: Apart from the above-mentioned costs, there are additional expenses to consider. These include obtaining a Digital Signature Certificate (DSC), the cost of a company seal, legal fees for any additional agreements, lease agreements for office space, obtaining necessary licenses and permits, and other administrative expenses. These costs can vary based on the specific requirements and location of the company.

Starting a private limited company in India involves several expenses that entrepreneurs must plan for. The costs primarily include registration fees, incorporation document fees, professional fees, stamp duty and notary charges, and other miscellaneous expenses. It is crucial to factor in these costs while budgeting for the establishment of a private limited company.