Characteristics of Private Limited Company

Dec 27, 2024
Private Limited Company vs. Limited Liability Partnerships

Table of Contents

What is a Private Limited Company?

A Private Limited Company is a business structure in India registered under the Companies Act, 2013. It is a separate legal entity from its owners, with its own rights and liabilities. Characteristics of private company include limited liability for shareholders, restrictions on share transfers, and a minimum of two members.

Under Section 2(68) of the Companies Act, 2013, a Private Limited Company is defined as a company that restricts the right to transfer its shares, limits the number of members to 200 (excluding employees), and prohibits any invitation to the public to subscribe for its securities.

Characteristics of a Private Limited Company

Characteristics of private companies make it a preferred business structure for growing startups and SMEs in India. A Private Limited Company has several distinct characteristics that define its structure, ownership, and operations. Features of a private limited company such as limited liability, perpetual succession, easier fundraising, and professional image help entrepreneurs scale their business while mitigating risks. Understanding these features of a private limited company is crucial for entrepreneurs considering this business model. These include:

Separate Legal Entity

A Private Limited Company is a separate legal entity from its shareholders. This means the company can enter into contracts, own assets, incur liabilities, and sue or be sued in its own name. The company's existence is independent of its members, providing continuity and perpetual succession.

Limited Liability of Members

One of the biggest advantages of a Private Limited Company is the limited liability protection it offers to its shareholders. The liability of members is limited to the amount of share capital they have subscribed to. Their personal assets are protected in case the company faces losses or legal issues. This reduces the financial risk for shareholders.

Minimum and Maximum Members

A Private Limited Company requires a minimum of two members and can have a maximum of 200 members (excluding employees). These members can be individuals, other companies, or foreign entities. Having multiple shareholders allows for pooling of resources and expertise.

Restriction on Share Transfer

Shares of a Private Limited Company cannot be freely transferred to the public. Any transfer of shares requires the approval of the company's Board of Directors. The right to transfer shares is restricted by the company's Articles of Association, and existing shareholders have the first right to purchase any shares offered for sale. This helps maintain control over ownership.

Minimum Capital Requirement

There is no minimum capital requirement for incorporating a Private Limited Company in India. This makes it easier for startups and small businesses to adopt this structure without significant upfront investment. However, the company's authorized and paid-up capital must be mentioned in its Memorandum of Association.

Perpetual Succession

A Private Limited Company has perpetual succession, which means its existence is not affected by the entry or exit of members. The company continues to operate even if all the original shareholders and directors change over time, providing stability and continuity for the business.

Use of "Private Limited" in Name

A Private Limited Company must use the words "Private Limited" or "Pvt Ltd" at the end of its name. This helps distinguish it from public limited companies and sole proprietorships. The name should not be identical or too similar to any existing company to avoid confusion.

Mandatory Registration

Incorporation of a Private Limited Company is mandatory and must be registered with the Registrar of Companies (ROC). The company comes into existence only upon registration and is given a Certificate of Incorporation. This is different from sole proprietorships and partnerships, which can operate without formal registration.

Statutory Compliance

Private Limited Companies are subject to various statutory compliances under the Companies Act, 2013. These include conducting board meetings, maintaining statutory registers and records, filing annual returns, and appointing auditors. Non-compliance can lead to penalties and legal consequences.

Documents Required to Register a Private Limited Company

1. Director Identification Number (DIN) for each proposed director

2. Digital Signature Certificate (DSC) for each proposed director

3. Proof of identity and address for directors and shareholders

4. Proof of registered office address

5. Memorandum of Association (MOA) and Articles of Association (AOA)

6. Consent letters from directors

7. PAN card of directors and shareholders

8. Passport-size photographs of directors

Process to Register Private Limited Company

Incorporating a Private Limited Company involves obtaining Director Identification Number (DIN), Digital Signature Certificate (DSC), and filing necessary documents required for pvt ltd registration. Seeking professional advice from legal and financial experts can help navigate the registration process smoothly. The process of registering a Private Limited Company involves the following steps:

  1. Obtain Director Identification Number (DIN) for each proposed director: Directors must apply for a DIN through the SPICe+ (Simplified Proforma for Incorporating a Company Electronically Plus) form. DIN can also be applied during incorporation.
  2. Acquire Digital Signature Certificate (DSC) for each proposed director: All directors and shareholders must obtain a Class 3 Digital Signature Certificate (DSC). The DSC is used to sign forms electronically during the registration process.
  3. Select and apply for a unique company name through the RUN (Reserve Unique Name) service: Use the RUN (Reserve Unique Name) service on the MCA portal to propose a unique company name. Ensure compliance with the Companies Act, 2013 and avoid prohibited or identical names.
  4. Draft the Memorandum of Association (MOA) and Articles of Association (AOA): Draft key documents, including:
  • Memorandum of Association (MoA) – Defines the company’s objectives.
  • Articles of Association (AoA) – Details operational rules and regulations. Obtain affidavits, declarations, and consent from directors.
  1. File the SPICe+ form along with required documents and payment of fees: Submit the SPICe+ form on the MCA portal with DSC. Attach MoA, AoA, and applications for PAN, TAN, and GST registration (if applicable). Pay the required fees and stamp duty online.
  2. Obtain Certificate of Incorporation from ROC upon successful registration: Upon approval, the Certificate of Incorporation is issued by the Registrar of Companies (RoC). This includes the Company Identification Number (CIN), confirming legal status.

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Types of Private Limited Companies

Based on the liability of members, Private Limited Companies can be categorised into three types:

  1. Company Limited by Shares: The liability of members is limited to the amount unpaid on their shares. This is the most common type of Private Limited Company.
  2. Company Limited by Guarantee: The liability of members is limited to the amount they have agreed to contribute to the company's assets in the event of its winding up.
  3. Unlimited Company: Members' liability is unlimited. They are liable for the company's debts and obligations.

Frequently Asked Questions:

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Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What are the benefits of a private limited company?

Some key benefits of a private limited company include limited liability protection for shareholders, better credibility and professional image, perpetual succession, easier access to funding, and ability to offer Employee Stock Options (ESOPs).

What is the difference between pvt ltd and llp?

Private Limited Company vs. Limited Liability Partnerships: A Private Limited Company has shareholders and directors, while an LLP has partners. LLPs have lesser compliance requirements compared to Private Limited Companies. However, Private Limited Companies offer more flexibility in ownership structure and fundraising.

Who is the owner of Pvt Ltd?

The owners of a Private Limited Company are its shareholders. The ownership is determined by the number of shares held by each member. The shareholders appoint directors to manage the day-to-day operations of the company.

How much tax does a private limited company pay?

Private Limited Companies are taxed as separate legal entities. The corporate tax rate is 25% for companies with an annual turnover of up to Rs. 400 crores (as of FY 2021-22). Surcharge and cess are applicable based on the company's income level.

What are the tax benefits of Pvt Ltd company?

Private Limited Companies can avail several tax benefits and deductions, such as:

  • Deduction of business expenses incurred wholly for the purpose of the business
  • Depreciation on fixed assets
  • Carry forward and set off of losses
  • Deductions for employee welfare expenses
  • Deductions for donations made to charitable organizations

Is GST required for a private limited company?

Yes, a Private Limited Company is required to register for Goods and Services Tax (GST) if its annual turnover exceeds the threshold limit (Rs. 40 lakhs for goods and Rs. 20 lakhs for services, as of FY 2021-22). GST registration is mandatory for companies engaged in inter-state transactions, irrespective of turnover.

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Private Company Vs Public Company: Key Differences Explained

Private Company Vs Public Company: Key Differences Explained

Are you an aspiring entrepreneur looking to start your own business? One of the crucial decisions you'll need to make is whether to structure your company as a private or public entity. Understanding the difference between private company and public company is essential for entrepreneurs, businessmen, and investors as it impacts ownership structure, funding, regulations, and operational transparency. 

Entrepreneurs and businessmen can choose the right structure for growth and compliance while investors evaluate risks, liquidity, and returns. Public companies are listed on stock exchanges, allowing easier capital access but with stricter compliance and disclosure requirements. 

Private companies offer more control and flexibility but limited fundraising options. This knowledge helps stakeholders make informed decisions regarding growth strategies, ultimately aligning their goals with the company's structure.

In this article, we'll dive deep into the characteristics of a private company and a public company, highlighting their key features, advantages, and differences. By the end, you'll have a clear understanding of which structure suits your venture best.

Table of Contents

What is a Public Company?

A public company, also known as a publicly traded company, is a corporation whose shares are freely bought and sold by the public on stock exchanges or over-the-counter markets. Key aspects of a public company include:

  • Unlimited number of shareholders.
  • Shares are publicly traded and easily transferable.
  • Must issue a prospectus before offering shares to the public.
  • Strict disclosure and reporting requirements.
  • Ability to raise substantial capital through public markets.
  • Governed by a board of directors responsible to shareholders.

Public companies must comply with stringent regulations set by securities commission like the the Securities and Exchange Board of India (SEBI). These regulations ensure transparency, protect investor interests, and maintain market integrity.

Features of Public Limited Company

  1. Free transferability of shares: Shares can be freely bought and sold on stock exchanges, providing liquidity to investors.
  2. No limit on number of shareholders: There is no restriction on the maximum number of shareholders a public company can have.
  3. Prospectus requirement: Public companies must issue a prospectus before offering shares to the public, disclosing key information about the company.
  4. Public disclosure of financials: Public companies are required to publicly disclose their financial statements on a regular basis.
  5. Strict compliance norms: Public companies are subject to stringent regulations and disclosure requirements set by governing bodies like SEBI.
  6. Access to capital markets: Public companies can raise substantial funds from a large pool of investors through various securities like IPOs, FPOs, rights issues and preferential allotments.
  7. Listing on stock exchanges: The shares of public companies are listed and traded on recognised stock exchanges.

What is a Private Company?

A private company, also referred to as a privately held company, is a business entity whose shares are not publicly traded. Ownership is closely held by a limited group of shareholders, such as founders, family members and private investors. Key characteristics of a private company include:

  • Limited to a maximum of 200 shareholders
  • Shares are privately owned and not freely transferable
  • Minimal disclosure requirements and greater privacy
  • Raising capital through private means like angel investors or venture capital
  • Closely controlled and managed by founders and early investors

Private companies have more flexibility in their operations and decision-making as they are not subject to the same level of public scrutiny and regulatory oversight as public companies.

Features of Private Company

  1. Restricted share transfer: Shares of a private company cannot be freely transferred and are subject to restrictions outlined in the company's articles of association.
  2. Limited number of shareholders: Private companies can have a maximum of 200 shareholders.
  3. No prospectus requirement: Private companies are not required to issue a prospectus to the public for raising funds.
  4. Confidentiality of financial information: The financial statements of private companies are not publicly disclosed and remain confidential.
  5. Fewer compliance requirements: Private companies have lesser compliance and regulatory filing requirements compared to public companies.
  6. Flexibility in management: Private companies have greater flexibility in their management structure and decision-making processes.
  7. No requirement for a statutory meeting: Private companies are not required to hold a statutory meeting or file a statutory report.

Public Company Vs Private Company

Following are the key differences between public and private companies:

Parameter Public Company Private Company
Ownership Shares are owned by the general public and can be freely traded on stock exchanges Shares are privately held by a limited number of shareholders
Share Transfer Shares can be freely transferred without restrictions Share transfer is restricted and subject to the consent of other shareholders or the company's articles
Number of Shareholders No limit on the number of shareholders Limited to a maximum of 200 shareholders
Prospectus Must issue a prospectus before offering shares to the public Not required to issue a prospectus for raising funds
Financial Disclosure Required to publicly disclose financial statements and reports Financial statements are not publicly disclosed
Compliance Subject to stringent compliance and regulatory requirements Fewer compliance requirements and regulatory filings
Access to Capital Can raise substantial funds from the public through capital markets Relies on private funding sources and has limited access to public capital
Management Separation of ownership and management, leading to potential agency problems Greater control and flexibility in management and decision-making
Valuation Determined by the market price of shares on stock exchanges Difficult to value in the absence of a public market for shares
Liquidity Shares are liquid and can be easily bought or sold on stock exchanges Shares are illiquid and not easily transferable

The choice between operating as a public or private company depends on various factors such as the company's capital requirements, desired level of control and flexibility, willingness to disclose financial information, and long-term objectives.

Can A Public Company Convert into a Private Company and Vice Versa?

Yes, a public company can be converted into a private company and vice versa, subject to certain conditions and procedures outlined in the Companies Act 2013.

To convert a public company into a private company, the following steps need to be taken:

  1. Pass a special resolution in a general meeting of the company to approve the conversion.
  2. Alter the company's memorandum and articles of association to reflect the changes required for a private company.
  3. File an application with the National Company Law Tribunal (NCLT) for approval of the conversion.
  4. Obtain approval from the NCLT after considering any objections or suggestions from regulatory authorities or other stakeholders.
  5. File the NCLT order approving the conversion with the Registrar of Companies (ROC) within 30 days.
  6. The ROC will issue a fresh certificate of incorporation reflecting the company's status as a private company.

Similarly, a private company can be converted into a public company by following these steps:

  1. Pass a special resolution in a general meeting of the company to approve the conversion.
  2. Alter the company's memorandum and articles of association to comply with the requirements of a public company.
  3. Increase the number of directors to the minimum required for a public company (3 directors).
  4. File an application with the ROC for approval of the conversion.
  5. Obtain approval from the ROC after ensuring compliance with all the necessary provisions.
  6. The ROC will issue a fresh certificate of incorporation reflecting the company's status as a public company.

Conclusion

Understanding the differences between private and public companies is crucial for entrepreneurs, investors and other stakeholders. While public companies offer the advantage of access to public capital and liquidity for shareholders, they also face stricter compliance requirements and public scrutiny. On the other hand, private companies provide greater control and flexibility to shareholders but have limitations in raising capital and providing liquidity to investors.

Regardless of the choice, both private and public companies play vital roles in the economy, driving innovation, creating jobs, and contributing to overall economic growth. Understanding their distinct characteristics and the implications of each structure is essential for navigating the complex world of business and making sound decisions.

Frequently Asked Questions

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Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What is a Public company?

A public company is a business entity whose shares can be freely bought and sold by the general public on stock exchanges. These companies are subject to stringent regulations and are required to disclose their financial information regularly.

What is a private company?

A private company is a business entity that is privately held and does not offer its shares to the general public. The ownership of a private company is limited to a small group of shareholders, and the shares are subject to transfer restrictions.

Can private limited companies issue shares?

Yes, private limited companies can issue shares to their existing shareholders or to new investors. However, the transfer of these shares is restricted and subject to the consent of other shareholders or the company's articles of association.

Is it better to be a private company or a public company?

The choice between being a private or public company depends on various factors such as the company's capital requirements, desired level of control and flexibility, willingness to disclose financial information, and long-term objectives. Each structure has its own advantages and disadvantages, and the decision should be based on a careful evaluation of the company's specific needs and goals.

Is it easier for public companies to raise capital than it is for private companies?

Yes, public companies generally have an easier time raising capital compared to private companies. 

Public companies can access a larger pool of investors by offering their shares to the general public through capital markets. They can raise substantial funds through various means, such as initial public offerings (IPOs), follow-on public offerings (FPOs), rights issues and preferential allotments. 

Private companies, on the other hand, rely on private funding sources such as promoter capital, venture capital, private equity, and debt financing, which can be more limited and challenging to secure.

Who can invest in a private company?

Investment in a private company is typically limited to a small group of shareholders, which may include the founders, family members, friends, and private investors such as angel investors, venture capitalists, and private equity firms. 

These investors are often accredited and have a higher risk tolerance compared to the general public. The shares of a private company are not freely traded on stock exchanges and are subject to transfer restrictions outlined in the company's articles of association or shareholder agreements.

Mukesh Goyal

Mukesh Goyal is a startup enthusiast and problem-solver, currently leading the Rize Company Registration Charter at Razorpay, where he’s helping simplify the way early-stage founders start and scale their businesses. With a deep understanding of the regulatory and operational hurdles that startups face, Mukesh is at the forefront of building founder-first experiences within India’s growing startup ecosystem.

An alumnus of FMS Delhi, Mukesh cracked CAT 2016 with a perfect 100 percentile- a milestone that opened new doors and laid the foundation for a career rooted in impact, scale, and community.

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Form 11 LLP Annual Return: Filing, Due Date, Penalties & FAQs

Form 11 LLP Annual Return: Filing, Due Date, Penalties & FAQs

If you’re running a Limited Liability Partnership (LLP), compliance might not be the most exciting part of your business. However, it’s essential for keeping your operations smooth and hassle-free. One key requirement is filing Form 11, an annual return that keeps the government updated about your LLP's structure and partners.

In this blog, we’ll cover everything you need to know about Form 11 LLP, from filing procedures to penalties for non-compliance.

Table of Contents

What is Form 11 and How to File It? 

Form 11 is an Annual Return of LLP. Every LLP in India must file with the Registrar of Companies (RoC) under the Limited Liability Partnership Act, 2008. It serves as a comprehensive summary of the LLP's management and structure for the financial year.

Here’s what Form 11 LLP typically includes:

  1. General Information:
    • LLP Name.
    • LLP Identification Number (LLPIN).
    • Date of Incorporation.
  2. Partner Information:
    • Names and details of designated and other partners.
    • Changes in partnership during the financial year, such as additions, resignations, or reassignments.
  3. Contribution Details:
    • The total contribution received by the LLP from partners.
    • Contributions made by individual partners during the year.
  4. Declaration of Compliance:
    • A confirmation that the LLP has met its statutory obligations during the year.

Steps to File Form 11

Filing Form 11 is a straightforward process. Follow these steps to ensure compliance:

  1. Download Form 11:

Visit the Ministry of Corporate Affairs (MCA) portal and download the latest version of Form 11.

  1. Fill in Basic Details

Provide the LLP’s basic details, including:

  • LLPIN.
  • Date of Incorporation.
  • Business activities during the financial year.
  1. Enter Partner Information:
    • List all designated and non-designated partners.
    • Include details of any changes in partnership, such as additions or removals.
  2. Attach Supporting Documents:

Upload any supporting documentation, including agreements or resolutions, if applicable.

  1. Certify the Form:

Ensure the form is digitally signed by one of the designated partners using a Digital Signature Certificate (DSC).

  1. Submit on MCA Portal:

Upload the completed form and pay the prescribed filing fee. Fees depend on the LLP’s total contribution as per the LLP Agreement.

Due Date for Filing Annual Return (Form 11)

The due date for filing Form 11 is May 30 every year, covering the financial year ending on March 31.

Important Note:

  • Filing Form 11 is mandatory regardless of whether the LLP has started its business. Even dormant LLPs are required to submit their annual return.

If you don’t file before Form 11 LLP’s due date, you can be penalised, so it's crucial to adhere to the timeline.

Additional Fee (Penalty) for Belated Filing of Annual Return (Form 11)

Failure to file Form 11 on or before May 30 can lead to significant financial penalties and legal complications. 

  • A penalty of LLP form 11 late fee of ₹100 per day is imposed for each day the filing is delayed.
  • The penalty has no upper limit, which means prolonged delays can result in substantial fines.

Continued non-compliance may lead to the LLP being marked as inactive by the RoC. While the designated partners may face disqualification from holding similar roles in other companies or LLPs.

What Are The Prerequisites?

Before filing, ensure that you’re fulfilling certain Form 11 LLp requirements:

  1. The LLP is registered and has an active status on the MCA portal.
  2. A valid DPIN of the Partner.
  3. A Digital Signature Certificate (DSC) is available for at least one designated partner.
  4. All pending compliance forms, such as Form 3 (LLP Agreement), have been filed.

What Are the Documents to be Submitted Along with Form 11?

Depending on the changes or updates during the year, the following documents are required for Form 11 LLP submission:

  1. List of Partners:

A detailed list of designated and other partners, including their roles and contributions.

  1. Contribution Proof:

Evidence of the capital contributed by each partner during the financial year.

  1. Supporting Agreements:

Copies of resolutions or amendments to the LLP Agreement, if applicable.

  1. Additional Documents:

Any other documents as required by the MCA portal based on the LLP’s activities.

{{llp-cta}}

Important Aspects to Note While Filing Annual Return for LLP

While LLP annual filling might seem straightforward, there are key details and considerations that can make a big difference. Overlooking these aspects could lead to errors, delays, or unnecessary penalties. To help you navigate this process smoothly, here are some important points to remember while filing your LLP’s annual return.

  1. Accuracy of Partner Details:

Ensure the names, roles, and contributions of all partners are correctly listed, as discrepancies can lead to rejections or penalties.

  1. Difference Between Forms:

Do not confuse Form 11 for LLP with Form 8, which deals with the financial health and solvency of the LLP. Both must be filed annually.

  1. Digital Signature Validity:

Verify the validity of the Digital Signature Certificate (DSC) before submission to avoid technical issues.

Certification in Annual Return (Form 11)

Certification plays a crucial role in the filing of Form 11 (Annual Return) for an LLP. It ensures that the information provided is accurate and compliant with the statutory requirements. 

While the form can be filed by the designated partner(s), certain conditions require additional certification by a practising professional, such as a Company Secretary.

When is Certification Required?

For LLPs meeting certain financial thresholds, certification of Form 11 by a professional ( Company Secretary) is mandatory:

  • If the LLP’s contribution exceeds ₹50 lakhs, or
  • If its turnover exceeds ₹5 crores,

Frequently Asked Questions

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Register your One Person Company in just 1,499 + Govt. Fee

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Register your Business starting at just 1,499 + Govt. Fee

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Register your Limited Liability Partnership in just 1,499 + Govt. Fee

Register your business

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What is the turnover limit for LLP Form 11?

The turnover limit for LLP Form 11 certification is ₹5 crores. If the LLP’s turnover exceeds this threshold during the financial year, the annual return must be certified by a practising Company Secretary.

What are the requirements for Form 11 certification?

Form 11 LLP requires certification from a practising Company Secretary if:

  1. The total contribution by the partners exceeds ₹50 lakhs, or
  2. The LLP’s turnover is more than ₹5 crores.

What happens if Form 11 is not submitted?

Failure to submit before Form 11 LLP’s due date results in penalties, which include:

  • A late filing fee of ₹100 per day until the form is submitted.
  • Additional compliance risks, including potential legal action or a change in the LLP’s status to “defaulting.”

What is Form 11 used for?

Form 11 is the Annual Return filed by LLPs to report the following details to the Registrar of Companies (RoC):

  • Information about the LLP's partners, including designated partners.
  • Changes in the structure or details of the LLP.

Summary of contributions made by the partners during the financial year.It ensures that the LLP remains compliant with the regulatory requirements under the LLP Act.

What does Section 11 provide under LLP?

Section 11 of the Limited Liability Partnership Act, 2008 outlines the procedural requirements for the incorporation of an LLP. It specifies the need to submit an incorporation document to the Registrar, along with necessary details like the name, address, and partner information of the LLP. 

Akash Goel

Akash Goel is an experienced Company Secretary specializing in startup compliance and advisory across India. He has worked with numerous early and growth-stage startups, supporting them through critical funding rounds involving top VCs like Matrix Partners, India Quotient, Shunwei, KStart, VH Capital, SAIF Partners, and Pravega Ventures.

His expertise spans Secretarial compliance, IPR, FEMA, valuation, and due diligence, helping founders understand how startups operate and the complexities of legal regulations.

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How Much Does It Cost to Register a Company in India in 2025?

How Much Does It Cost to Register a Company in India in 2025?

Starting a business in India involves several legal and regulatory steps, one of the most important being company registration under the Companies Act, 2013. While the process itself has been digitised through the Ministry of Corporate Affairs (MCA) portal, the cost of registering a company in India can vary significantly.

It depends on the type of business you choose, your authorised capital, and even which state you’re in. Add in government fees, professional charges, and compliance costs, and the numbers can look very different for a tech startup versus a small consultancy.

This blog breaks down the different types of company registrations, their associated costs, and additional fees you should be aware of while planning your business launch.

Table of Contents

Types of Company Registrations in India

The choice of business structure impacts both compliance requirements and registration fees. Common options include:

Breakdown of Company Registration Fees

The cost of company registration includes government charges, professional fees, and incidental expenses. Below is an approximate breakdown (may vary by state and authorised capital):

  • Private Limited Company: ₹7,000 - ₹25,000

  • Public Limited Company: ₹15,000 - ₹30,000

  • Limited Liability Partnership (LLP): ₹6,000 - ₹12,000

  • One Person Company (OPC): ₹7,000 - ₹20,000

  • Section 8 Company: ₹10,000 - ₹15,000

Disclaimer: These are approximate ranges. The final cost depends on factors like authorized capital, the state of registration, and the service provider you choose.

A Detailed Breakdown of Company Registration Cost

To understand the price ranges above, it's essential to know what you're paying for. The total cost is a sum of three key components:

A. Government & Statutory Fees

These are mandatory fees paid to the Ministry of Corporate Affairs (MCA) and state governments.

  • SPICe+ Form Filing: This is the primary fee for incorporation. It varies based on the company's authorized share capital. For most small companies with capital up to ₹15 Lakhs, there is no filing fee, but other charges still apply.
  • Stamp Duty: This is the most significant variable. It is a state-levied tax on the Memorandum of Association (MoA) and Articles of Association (AoA). Stamp duty in states like Maharashtra or Delhi is different from Tamil Nadu or Karnataka, causing major price variations.
  • PAN and TAN Application: A fee of approximately ₹110 is charged for issuing the company's Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
  • Name Approval (RUN): While you can file the name within the SPICe+ form, a separate name reservation application costs ₹1,000.

B. Professional Fees

This is the fee paid to a Chartered Accountant (CA), Company Secretary (CS), or a law firm for their expertise.

  • What it covers: Drafting legal documents (MoA & AoA), filing the forms correctly, providing consultation, and ensuring the process is smooth and error-free.
  • Why it varies: Fees depend on the complexity of the registration, the professional's experience, and the city of operation. This fee is the primary reason for the wide cost range seen in the market.

C. Ancillary Costs

These are other necessary expenses incurred during the process.

  • Digital Signature Certificate (DSC): Required for all directors/partners to sign the electronic forms. A DSC for two directors typically costs between ₹1,000 - ₹2,000.
  • Registered Office Address: While not a fee, you must have proof of a registered office. If you don't own a property, costs for a rental agreement, NOC, or a virtual office service will apply.
  • Miscellaneous Expenses: Small costs for notarization, printing, and courier services.

Costs of Other Essential Registrations for Company Incorporation

Once your company is registered, you will need other licenses to operate legally. Here are the most common ones and their associated costs.

Registration Government Fee Typical Professional Fee (Approx.)
GST Registration ₹0 (Free) ₹1,500 - ₹3,000
MSME (Udyam) Registration ₹0 (Free) ₹1,000 - ₹2,500
Import Export Code (IEC) ₹500 ₹2,000 - ₹3,000
Trademark Registration ₹4,500 (for Small Enterprises/Individuals) ₹3,000 - ₹7,000
Professional Tax (State-specific) Varies by state (e.g., ₹2,500 annually in Tamil Nadu) ₹1,000 - ₹2,000

Factors Affecting Company Registration Fees

Several factors influence the overall cost of registration:

  1. Type of company: Pvt. Ltd., LLP, OPC, etc.
  2. Authorised share capital: Higher capital means higher government fees.
  3. State of incorporation: Stamp duty varies across states.
  4. Professional help: Costs increase if you hire legal or financial consultants.
  5. Compliance requirements: Annual filings, GST, and audits add to expenses.

Key Costs Involved in Company Registration

When budgeting for company registration in India, consider the following expenses:

  • Office Address Proof- Home, rented, or virtual office setup costs.
  • Digital Signature Certificate (DSC)
  • Director Identification Number (DIN)
  • Name Approval Fee
  • Stamp Duty – State-dependent
  • Registration Filing Fees- Depends on authorised capital.
  • Professional Fees
  • PAN & TAN Application
  • Miscellaneous Costs- Printing, notarisation, shipping, etc.

Tips to Reduce Company Registration Costs

  • Choose the right business structure: Avoid overcomplicating; pick a structure that fits your scale and goals.
  • Hire affordable professionals: Compare fees before finalising consultants.
  • Stay compliant: Timely filings prevent late fees and penalties.

Important update- Additional fees apply for the delay in filing forms

The MCA has tightened rules around compliance. Delayed filing of statutory forms now attracts additional fees, which can be significantly higher than the standard charges.

For example:

  • Delay of up to 30 days: 2x of normal fees
  • Delay of 30- 60 days: 4x of normal fees
  • Delay beyond 180 days: 12x of normal fees

This makes it important for companies to track deadlines, file forms on time, and seek professional assistance when needed to avoid heavy penalties.

Frequently Asked Questions (FAQs)

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Register your Business at just 1,499 + Govt. Fee

Register your business
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Register your Private Limited Company in just 1,499 + Govt. Fee

Register your business
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Register your One Person Company in just 1,499 + Govt. Fee

Register your business
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Register your Business starting at just 1,499 + Govt. Fee

Register your business
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Register your Limited Liability Partnership in just 1,499 + Govt. Fee

Register your business

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

How frequently are the registration fees and compliance costs updated?

The Ministry of Corporate Affairs (MCA) and respective state governments revise registration fees and compliance costs from time to time. Updates usually happen when:

  • There are amendments to the Companies Act, 2013 or the LLP Act.
  • Stamp duty rates change at the state level.
  • MCA introduces new rules for compliance, penalties, or late fees (for example, the recent hike in additional filing fees for delays).

What factors influence the cost of company registration in India?

The total cost of company registration depends on several factors:

  • Type of company
  • Authorised share capital 
  • State of incorporation & stamp duty
  • Number of directors & shareholders
  • Professional services
  • Compliance requirements

Is GST applicable to company registration fees?

  • Government fees (RoC charges, stamp duty, PAN/TAN, DIN, DSC, etc.) – No GST applies.
  • Professional or consultancy fees (CA, CS, or legal professional services) – 18% GST is applicable on the service charges.

So, while statutory fees don’t attract GST, you will pay GST on professional help.

What are the rules for the company registration of a charge?

A “charge” refers to any security interest created on a company’s assets (like a mortgage or hypothecation) to secure a loan. Under the Companies Act, 2013:

  • Every company creating a charge must register it with the RoC within 30 days of its creation using Form CHG-1 (for other than debentures) or Form CHG-9 (for debentures).
  • If not filed within 30 days, registration can still be done up to 300 days with additional fees.

If the charge is not registered, it becomes void against creditors and liquidators, though still valid between the company and lender.

Mukesh Goyal

Mukesh Goyal is a startup enthusiast and problem-solver, currently leading the Rize Company Registration Charter at Razorpay, where he’s helping simplify the way early-stage founders start and scale their businesses. With a deep understanding of the regulatory and operational hurdles that startups face, Mukesh is at the forefront of building founder-first experiences within India’s growing startup ecosystem.

An alumnus of FMS Delhi, Mukesh cracked CAT 2016 with a perfect 100 percentile- a milestone that opened new doors and laid the foundation for a career rooted in impact, scale, and community.

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Dhaval Trivedi
TBS Magazine
Hey, Guys!
We just got incorporated yesterday.
Thanks to Rize team for all the Support.
It was a wonderful experience.
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Dhaval Trivedi
Nayan Mishra
https://zillout.com/
Smooth onboarding, seamless incorporation and a wonderful community. Thanks to the #razorpayrize team! #rizeincorporation
Dhaval Trivedi
Basanth Verma
shopeg.in
Exciting news! Incorporation of our company, FoxSell, with Razorpay Rize was extremely smooth and straightforward. We highly recommend them. Thank you Razorpay Rize for making it easy to set up our business in India.
@foxsellapp
#razorpayrize #rizeincorporation
Dhaval Trivedi
Prakhar Shrivastava
foxsell.app
We would recommend Razorpay Rize incorporation services to any founder without a second doubt. The process was beyond efficient and show's razorpay founder's commitment and vision to truly help entrepreneur's and early stage startups to get them incorporated with ease. If you wanna get incorporated, pick them. Thanks for the help Razorpay.

#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
TBS Magazine
Hey, Guys!
We just got incorporated yesterday.
Thanks to Rize team for all the Support.
It was a wonderful experience.
CHEERS 🥂
#entrepreneur #tbsmagazine #rize #razorpay #feedback
Dhaval Trivedi
Nayan Mishra
https://zillout.com/