Private Company Incorporation Fee and Taxes

  • February 13, 2017
  • Registrationwala
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Company Incorporation is a much-needed process for establishment of any business firm. Business should be in regular interaction with a government department to run business uniformly. This is compulsory for many reasons like fund raising, financial performance, taxation information, etc.

Company registration cost is same in almost all the states in India. But, the cost of stamp duty is high in (Madhya Pradesh, Kerala, Punjab). Stamp duty costs around Rs. 7000 if the capital investment is Rs. 1 lakh but it is Rs. 15000 in above-mentioned states. Basically, this amount depends upon authorized capital.

Need of Company Registration

The company needs a license to offer certain services. This is a legal norm which is not only followed by a private limited company but by all types of companies. GST registration is compulsory to charge  tax from customers. When company's turnover crosses a certain amount then in selling goods they charge sales tax (requires sales tax registration).Deduction of professional tax also needs registration. Licensing is necessary under Shops & Establishment Act and in Import and Export, you need code of Import and Export.

Costing of license differs in each state. Most companies hire some expert, but this basically nominal. There is a variation in costing from Rs. 7000 to Rs. 15000 in each state. Costing of this is a one-time affair.

Mandatory Compliance

Mandatory compliance involves a lot of declaration to Ministry of Corporate affairs. In a new company there are some processes like drafting of the board meeting, filing financial directors, return file and much more. These jobs do not require much of the effort but summing up these activities need a huge effort.

Mostly it cost Rs. 18000. Annually, but it cost more with a local Company Secretary.

Accounting & Auditing

Maintaining Books of account is a regular process for every company. There is a variation in charges according to the entries. Most probably it cost Rs.3000 per month. In Proprietorships and Partnership this process not mandatory but, in private limited company, it is necessary.

Mostly it costs 3000 a month for accounting and at least Rs. 15,000 for auditing.

Miscellaneous Compliances

Ministry of Corporate affairs keeps track of all the aspect of business. Change in business structure for example, adding or replacing the director or investor. Small Companies do not hire Company Secretary but there are some fees which need to be paid like professional fee or government fee.

Mostly professional costs from Rs. 1500 to Rs. 2000 and also the government in addition, which vary.

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