Cost of Company Registration

The overall cost of Company Registration is quite essential for starting a Company in India. We are here to discover the various elements which add up to this cost including Government fees, professional charges and fees for essential prerequisites like DIN & DSC.

Startups established as companies in India are required to get a mandatory registration under the Companies Act. However, most startup-owners lack the legal know-how of the company registration procedure and cost, thus being compelled to seek professional consultation for the same. The added charges of consultation, along with the government fees for company registration, results in a huge amount being paid by startup companies to get incorporated as a legal entity.

Company registration in India is governed by the Company’s Act 2013 under the Ministry of Corporate Affairs (MCA). The cost of registering a company in India varies according to the number of stakeholders and size. There are different types of business structures under which an entrepreneur can register a company depending upon the need and nature of their Company. Therefore, the fee for incorporation varies accordingly to the nature of the business structure and state.

What are the Factors Influencing Company Registration Cost in India?

Type of Company: The type of company you choose to register plays a significant role in determining its registration fees. Each type of company, such as a private limited company, public limited company, or one-person company, has specific requirements and compliance obligations for incorporation. For instance, a private limited company may have a higher registration fees compared to a one-person company due to additional statutory requirements, such as, appointment of additional directors, admitting additional shareholders, drafting additional documents, and so on.
Stage of Company Incorporation: The stage of incorporation at which your company is can also impact the overall cost of registration. Pre-registration costs include name reservation, drafting the Memorandum of Association and Articles of Association, and acquiring other necessary documents like DIN and DSC of promoters. Once this stage is surpassed, we have costs of filing the application and submitting the documents to the ROC. Even after registration, post-registration costs like obtaining, PAN, TAN, and various other tax and labour law registrations are incurred.
State of Incorporation: The state in which you choose to incorporate your company can affect the registration fees and overall cost as well. Different states in India have different fee structures, stamp duty charges, and compliance costs applicable . So, it is important to consider the state-specific requirements while estimating the overall cost of company registration for your startup.
Requirement for Professional Services: Engaging legal and professional services is crucial for a smooth company registration process. The professional fees charged by lawyers, chartered accountants, or company secretaries for incorporating your company can vary based on their expertise and experience, as well as the complexity of the process. It is advisable to research and compare the fees charged by different professionals to ensure you are offered quality services at a reasonable cost.
Additional Requirements: Besides the primary costs involved like the registration fee and professional charges, there may be additional expenses like fees for DIN, name reservation, digital signature certificates, notary stamp, stamp duty, and other incidental charges. For instance, obtaining digital signature certificates (DSC) of promoters are required for authenticating the Company Registration form. Similarly, all directors of the company are required to pay the fees to obtain their DIN before company incorporation.

What are the Different Stages in Company Registration Cost?

Paying DIN and DSC Fees: The first step is to obtain a Director Identification Number (DIN) for all the proposed directors of the company. This is done by filing an application with the Ministry of Corporate Affairs (MCA). Additionally, a Digital Signature Certificate (DSC) is required for online filing of documents. If you’re at this stage, you need to spend the prescribed amounts fees in acquiring DIN and DSC from the respective authorities.
Drafting and Paying Stamp Duty for MOA and AOA: The next stage involves drafting the Memorandum of Association (MOA) and Articles of Association (AOA), which are essential documents defining the company’s objectives, rules, and regulations. Once drafted, the documents have to be stamped by a public notary for which stamp duty charges and notary fees applicable in the state will have to be paid. .
Application & Document Filing Fee: After the MOA and AOA are prepared, the next step is to file an application for company incorporation with the Registrar of Companies (RoC). Along with the application, certain documents need to be attached in their digital formats. At this stage, the application fees for Company Registration will have to be paid, which will be based on Authorised capital of the company.
Post-Incorporation Compliance Fees: After the company is registered, certain post-incorporation compliance requirements need to be fulfilled. This includes obtaining a Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN), and Goods and Services Tax (GST) registration, if applicable. If you use the integrated SPICe Plus Form for incorporation, you can fulfil most of these compliances free of cost (only company registration cost will be applicable).
Cost of Opening a Bank Account: Finally, the company needs to open a bank account in its name. While this stage does not incur any government cost, it is worth noting that there may be charges associated with opening and maintaining the bank account, such as minimum balance requirements or transaction fees.

FAQs

Why should I register my company?

Registering your company provides several benefits, including legal recognition, limited liability protection for owners, potential tax advantages, and enhanced credibility with customers and partners.

What are the typical costs associated with company registration?

The costs can vary depending on the country and the type of company being registered. Typically, costs include government filing fees, legal or consulting fees, and other administrative expenses.

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