In India, company registration is governed by the Companies Act 2013, which the Ministry of Corporate Affairs administers. In India, business entities have different registration costs, including Person Companies, Private Limited Companies, Small Producer Companies, etc.
Establishing a company in India requires a thorough understanding of the total cost of company registration. The number of stakeholder groups and the organization’s size affect how much it costs to register an organization. When starting a firm, entrepreneurs can choose from various business structures based on their enterprise’s goals and unique requirements.
As a result, the registration costs will vary based on the state of registration and the business structure selected. Several factors, including the number of directors, members, authorized share capital, and professional costs, affect the company’s formation cost.
Key Factors Affects the Company Registration Cost in India
Some of the key factors that affects the company registration process in India are given below:
Company Type
Which company one wants to register that also affects the cost of the incorporation of the company. Hence first you have to decide which corporate body you want to register. Depending on the same cost of incorporation will be calculated.
Stage of Company Incorporation
There are various stages of the incorporation of the company like prerequisite stage, registration stage, post requisite stage etc. Depending on the stage of registration we calculated the amount which will be required for the completion of the incorporation of the company in India.
State of Incorporation
The state in which you decide to incorporate your business may also have an impact on the total cost and registration costs. In India, many states have varying fee schedules, stamp duty amounts, and associated compliance expenses. For this reason, when calculating the total cost of company registration for your firm, it is crucial to take the state-specific criteria into account.
Professional Services
Company incorporation or registration is not a child play hence it always requires expert advice or we can say professional help for which applicant needs to pay professional fees which is also the intrinsic part of the cost of registration of a company in India.
Extra Requirements
There are a number of extra expenses like fees for DIN and DSC, name approval charges of the government etc. all these are also there in the cost of the company. We cannot ignore the changes of compliances of the company as well. In short we can say that except professional and government fees there are a number of other requisites which need to be done timely and their cost is also involved in the registration cost.
Various Phases of the Cost of the Company Incorporation
Some of the key phases of the cost of the company incorporation are given below:
Paying the DSC and DIN Fees
The very first cost which you need to pay is the fees for the DSC as well as DIN of the directors of the company. It varies as per the number of directors in a company. For example if there are a total of 2 directors in a company and the cost for one DSC and one DIN is Rs. 1000 then cost for two directors will be Rs. 2000/.
Preparing and Paying Stamp Duty for MOA and AOA
There are two very important documents when it comes to the registration of the corporate body in India and these two documents are MOA and AOA. Without these two documents one callot form a company in India hence their stamp duty is also involved in the cost of company registration.
Application & Document Filing Fee
Professional who is going to file your application before the Registrar of the Companies will also take his or her professional fees and with the same you need to pay government fees as well. Hence application and document filing fees involved professional as well as government charges.
Fees Associated with Post-Incorporation Compliance
In India, there are various business structures and service categories. Regardless of the kind of company, all need certain government registrations. For import-export businesses, IEC registrations are required. If you work in a profession, you must also register for professional taxes. For small and medium-sized businesses, EPF registration is required. Finally, MSME registration is required.
There are additional fees associated with other registration types, such as professional and government fees. Registration fees might range from Rs. 1500 to Rs. 15000, contingent on task difficulty, taxes, and other factors.
Government Fees of Registration of Different Company Structure
Given below we have discussed the government fee structure for different corporate bodies:
Fee for One Person and Small Companies in India
The registration fees for a company’s authorized capital in India vary based on the amount of capital declared. For authorized capital ranging from Rs. 10,00,000 to Rs. 50,00,000, the registration fee is Rs. 2,000. Additionally, there is an incremental fee of Rs. 200 for every increase of Rs. 10,000 in nominal share capital within this range.
For authorized capital from Rs. 50,00,000 to Rs. 1 crore, the registration fee is Rs. 1,56,000, with an additional charge of Rs. 100 for every increment of Rs. 10,000 in nominal share capital, up to a maximum of Rs. 250 crore.
Above Rs. 1 crore in authorized capital, the registration fee is Rs. 2,06,000, accompanied by an incremental charge of Rs. 75 for every Rs. 10,000 increase in nominal share capital, also capped at Rs. 250 crore.
Fees For Companies Other Than One Person Or Small Companies
The registration fees for a company’s authorized capital in India are structured as follows:
- For authorized capital under Rs. 10,00,000, the registration fee is Rs. 5,000.
- For authorized capital from Rs. 1,00,000 to Rs. 5,00,000, the registration fee is also Rs. 5,000. Additionally, there is an additional fee of Rs. 400 for every Rs. 10,000 or part thereof of authorized capital within this range.
- For authorized capital from Rs. 5,00,000 to Rs. 50,00,000, the registration fee is Rs. 21,000. An additional charge of Rs. 300 applies for every Rs. 10,000 or part thereof of authorized capital within this bracket.
- For authorized capital from Rs. 50,00,000 to Rs. 1 Crore, the registration fee is Rs. 2,06,000, and there is an incremental charge of Rs. 100 for every Rs. 10,000 or part thereof of the authorized capital.
- For authorized capital exceeding Rs. 1 Crore, the registration fee remains Rs. 2,06,000. However, there is a reduced incremental charge of Rs. 75 for every Rs. 10,000 or part thereof of the authorized capital, capped at a maximum of Rs. 2.50 crores.
Fees For Companies Without A Share Capital
The registration fees for companies based on the number of members specified in their Memorandum of Association (MOA) are structured as follows:
- For companies with fewer than 20 members, the registration fee is Rs. 2,000.
- For companies having 20 to 200 members, the registration fee is Rs. 5,000.
- For companies with more than 200 members, the registration fee is also Rs. 5,000. In addition to this base fee, an extra charge of Rs. 10 is applied for each member exceeding 200. However, this additional fee is capped at a maximum of Rs. 10,000.
Fees For A Company With A Share Capital
The registration fees for a company’s authorized capital in India are categorized based on different ranges as follows:
- For authorized capital up to Rs. 1,00,000, the registration fee is Rs. 200.
- For authorized capital ranging from Rs. 1,00,000 to Rs. 5,00,000, the registration fee is Rs. 300.
- For authorized capital between Rs. 5,00,000 to Rs. 25,00,000, the registration fee is Rs. 400.
- For authorized capital from Rs. 25,00,000 to Rs. 1 crore, the registration fee is Rs. 500.
- For authorized capital of Rs. 1 crore and above, the registration fee is Rs. 600.
Conclusion
A business’s type, state of formation, and the professional services used are among the variables that affect the costs and fees associated with registering a company in India. Because of the integrated e-Form SPICe, the Ministry of Corporate Affairs has made doing business easier by streamlining the procedure. AGMs, board meetings, auditor appointments, and financial statement filing are among the mandated criteria that corporations must fulfill after registering. On-time compliance builds credibility and guarantees legal compliance. Companies should also be aware that starting in July 2022, there will be additional fines for late form submissions. In India, entrepreneurs can develop and run their enterprises legally and efficiently with the help of thorough planning and budgeting.
FAQs
What factors influence the cost of company registration?
The type of company chosen, state-specific fees, and professional service charges.
Are there ongoing costs after company registration?
Yes, including annual compliance fees, tax registrations, and potentially legal fees for amendments.
What are typical upfront expenses for company registration?
Upfront expenses include DIN/DSC fees, stamp duty for MOA/AOA, and ROC application fees.
Can the cost vary based on the company’s structure?
Yes, private limited, public limited, and one-person companies have different regulatory requirements and associated costs.
Are there cost-saving measures for company registration?
Using integrated forms like SPICe Plus can reduce compliance costs; comparing professional fees helps find cost-effective services.
