Many people stop themselves from going for the Private Limited Company registration for their businesses, because they still think that it will cost them a lot. But that time is gone, after the government has made changes in the paid up capital limit of such companies, the cost for the registration of Private Limited Companies became very reasonable. This change was introduced in order to make it easy for the startups to get themselves registered as Private Limited Company. Now the cost to start a Private Limited Company is very reasonable, hence anybody can go for the same. In order to know more regarding the cost to start a Private Limited Company in India must continue with this write-up till the end of the same.
What is a Private Limited Company?
A corporate body which is incorporated by minimum paid up capital of Rs. 1 lakh, with minimum two directors which can go up to 200 is called a Private Limited Company. Such entities are having a number of benefits. If you are confused with respect to the entity for your business you can go with the Private limited company. It suits almost every type of business. Only thing you need to worry about is the cost to start a Private Limited Company. Always check your budget before choosing this entity because it needs a little bit of investment.
Minimum Requirement of a Private Limited Company
Some of the key requirements for the Private Limited Company registration are mentioned below:
- It needs minimum two directors
- To have minimum paid up capital is also necessary
- Must have a name for the company which is unique
- Out of the minimum two directors it is necessary that one director is resident of India
- Registered business address proof will be required
- Details of the key members of the company
- Bank account details of the key members of the company
- Minimum cost to start a Private Limited Company
What is the Cost to Start a Private Limited Company?
The minimum amount of money to start a Private Limited Company is not very high nor it is uniform for all the states of India. In India the stamp duty for the registration of Private Limited Companies varies state to state. That is why it can’t be possible to give a particular figure for the cost to start a Private Limited Company, but the following information will definitely give you a rough idea regarding the same:
Minimum Paid-up Capital
The minimum paid-up capital requirement for the registration of a Private Limited Company in India is Rs. 1 lakh. This amount is must and one cannot form Pvt. Ltd. Company after ignoring it. As it is the minimum requirement, it may be hired but that is completely on the choice of the owner of the company. Always remember that if your paid-up capital will increase it may also affect the stamp duty.
Registration Fees or Stamp Duty
Registration fees here refers to the stamp duty of the company. For some states it goes in thousands whereas for some it is in hundreds only. This can be determined through the portal of the Ministry of Corporate Affairs according to one’s paid-up capital and the state of business. Due to the variety of stamp duty it is impossible to give a uniform figure of the stamp duty for the company registration.
Fees for the DSCs
Digital Signature Certificates are must in order to complete the process of incorporation of any kind of entity. Same goes for the Private Ltd Company. Digital Signature Certificates are made as per the number of directors. If a company is forming with two directors then two Digital Signature Certificates will be required. The average cost for one Digital Signature Certificate is Rs. 2000. If there are two directors it will be Rs. 4000 and so on.
Professional Fees for the Pvt. Ltd. Company Registration
As there are a number of legal and technical formalities involved in the process of registration of such a company it is suggested to take help of an expert. If you are taking advice from a professional who may be a company secretary or chartered accountant or an Advocate, you need to pay them a fee for their consultation. Again the consultation charges may vary professional to professional. Experienced professionals may charge a little high. Generally the professional fees for this type of company incorporation is between Rs. 5000-15000.
Miscellaneous Expenses
Above mentioned charges are not the only cost to start a Private Limited Company. There are many other things which are included in the cost to start a Private Limited Company in India. These changes include the expenses of the company, accounting and bookkeeping of the company, cost of running a company etc.
Benefits of Private Limited Company Registration
Some of the key benefits or advantages due to which it is suggested to the entrepreneurs to opt for private Ltd Company are:
- The registration process is simple.
- The full registration procedure can be completed online, allowing for a convenient location.
- Time and effort can be saved by not having to visit suppliers in person.
- Option to free up time by hiring an expert to help.
- boosts the company’s marketability and trustworthiness
- Builds the company’s reputation in the marketplace
- Trustworthiness is increased through government verification and incorporation.
- Customers can check information on the Ministry of Corporate Affairs website.
- Platforms validated by the government encourage trust.
- Investors are drawn to private businesses.
- Data from internet registered firms is accessible to MCA.
- These companies are more appealing to investors because government supervision assures compliance and discourages fraud.
Conclusion
So, the cost to start a Private Ltd Company isn’t as exorbitant as it was perceived before. With changes in the paid-up capital limits, the expense for registering a Private Ltd Company has become quite reasonable. Now it has become an accessible choice for aspiring entrepreneurs. Generally, the costs involve the minimum paid-up capital requirement, stamp duty varying across states, fees for Digital Signature Certificates, professional consultation charges, and other miscellaneous expenses. However, the benefits of a Private Limited Company registration are substantial, including simplicity in the registration process, enhanced trust, improved market reputation, and increased credibility, making it an attractive option for businesses.
