Expenses and Time Involved in Incorporating a Private Limited Company

Being one of the quickest creating economies, India is home to a huge number of trying business people. Most of them want to fuse an enlisted company having a different lawful personality according to the law. From various alternatives accessible like one individual company, an open company, limited risk organization and private limited, the choice that is most favored by the new businesses is a private limited company. This is because of various advantages related with this business structure.

One significant thing that abstains them from doing so is the disarray about the expense and time engaged with private limited company enlistment. Today, with this article we will comprehend the time and cost associated with private limited company enlistment in India. To start let us initially comprehend the importance of private limited company.

What is the private limited company?

Private Limited Company is a privately held business that can be consolidated with least 2 and limit of 200 individuals. A portion of the significant advantages of the private limited company incorporate limited obligation, separate legitimate character, the extent of outside direct speculation and so on.

Highlights of private limited company

A portion of the highlights of the private limited company-

Farthest point on individuals risk

In the private limited company, the obligation of individuals is limited to their offer as it were. Accordingly the individuals can't be considered mindful by and by for gatherings the liabilities of the company.

Interminable progression

The private limited company shaped is a totally unmistakable character from its individuals according to law. In this way the life of the company never arrives at end in any event, when the life of individuals reaches end.

Number of chiefs

Just two chiefs are required to frame the private limited company that makes it simpler to shape this type of company.

Separate legitimate personality

The legitimate personality of the company is totally particular from its individuals. In this manner a company can hold property in its name, Obtain trademark enrollment and so on.

Elements influencing the expense of private limited company enlistment

The method of private limited company is practically same in each state. Notwithstanding, the cost engaged with private limited company enlistment is extraordinary. Do you know why? This is on the grounds that the stamp obligation of each state is diverse that thus make the expense of company enlistment variable in particular states. In addition, there are a few different variables that effect the expense of private limited company enlistment. Underneath we have rattled off specific factors on which the expense of company enlistment will depend-

• Authorized Share Capital of the company
• Number of Directors in the company
• Stamp Duty of the State where the company is proposed to be registered
• Charges are taken by professionals like CA’s or CS or Lawyers.

Procedure

Now we will understand the step by step procedure of private limited company registration in India, the cost involved in it and the time taken at each step.

Digital Signature Certificate – To start the procedure of private limited company registration the directors and subscriber to the memorandum of the company are required to obtain the digital signature certificate. This is because in order to validate the documents filed electronically attaching a valid DSC is mandatory. One thing to be noted here is that Chartered Accountants or Company Secretary are not required to obtain DSC.

Cost – For one Digital Signature Certificate, the cost is 500 Rs. As minimum two members are required to register a private limited, total cost involved in acquiring DSC becomes 1000 Rs.

Time Taken – 1 day

Directors Identification number – After obtaining DSC the directors of the company is required to apply for director identification number. It is unique number issued by the ministry of corporate affairs that is mandatory required to be obtained by every person desiring to act as a director in any company.

Cost – For each DIN 500 Rs. is government fees. Just like DSC minimum, two DIN is required to be obtained by the company. Thus, the total cost involved in this step is 1000 Rs.

Time – 1 day

Obtaining Name Approval – If you desire to seek name approval in advance you can apply for it through Reserve Unique Name form. In this form, you can provide any two unique company’s name preferences. If you desire to get the name approval in one shot make sure to select the name as per the ministry’s guidelines.

Cost – The one-time cost of filing this form is only 1000 Rs.

Time took- 1-2 days

Filing of incorporation forms – This is the final and most crucial step in the process of company registration. The major cost and time of private limited company registration are involved in this step only. Factor that plays a major role in this step is the authorized share capital of the company. In this step the various forms like spice form, MOA and AOA are required to be filed. You can get the cost details for this part from the ministry of corporate affairs website by entering the authorized share capital amount of your company. In case you select SPICE from the drop down and then enter the share capital amount for registration, it will show you the cost for filing MOA, AOA.

Cost – As the exact cost will depend upon case to the case here we provide you the estimated cost for filing these forms and obtaining PAN and TAN of the company-

1. Stamp paper and notary charges for affidavit- 200 approx.
2. SPICE Form – No charges.
3. Memorandum of association- 2000 approx. However, stamp Duty Charges depending upon the state of registration.
4. The article of Association- 300 approx. However, stamp Duty Charges depending upon the state of registration.
5. Permanent Account Number (PAN) of the company- 107 Rs. Approx.
6. Tax deduction and collection account number- 63 Rs. Approx.

One important thing to be noted here is that this is the approximate government cost involved in the private limited company. The exact cost will vary from state to state and other factors.
In addition to the cost mentioned above the professional charges charged by the chartered accountant or the company secretary will also be added to the cost. That will make the cost of private limited company registration in India around INR 10,000/.