Power of Attorney (POA) in India: Meaning, Types & Process Explained

Aug 31, 2025
Private Limited Company vs. Limited Liability Partnerships

A Power of Attorney (POA) is a legally recognised tool in India that allows you to delegate authority to another individual. Whether it’s managing property transactions, overseeing business operations, or making urgent healthcare decisions, having someone you trust act on your behalf becomes essential.

It ensures your affairs continue smoothly and lawfully, even when you are unable to manage them directly. 

In this guide, we’ll cover the definition of a Power of Attorney, its importance, types, and structure and provide insights on drafting, revoking, and using it effectively.

Table of Contents

What is a Power of Attorney?

A Power of Attorney (POA) is a legal document in which one person, known as the Principal, authorises another person, called the Attorney-in-fact or Agent, to act on their behalf.

  • Purpose: To delegate decision-making powers for specific or broad tasks.
  • Scope: May cover financial, property, legal, or medical matters.
  • Duties of Attorney-in-Fact: The agent is expected to act in good faith, follow the instructions of the principal, and protect the principal's best interests.

In India, a POA is governed by the Indian Contract Act, 1872, and recognised under the Powers of Attorney Act, 1882.

Why is a Power of Attorney Important?

A Power of Attorney holds significance because:

  • Delegates responsibilities: Useful when you live abroad or are unavailable to handle tasks.
  • Ensures legal protection: Provides a valid legal framework, reducing the risk of fraud or disputes.
  • Offers flexibility: Can be broad or limited, depending on your needs.
  • Medical decision-making: Ensures someone you trust can make healthcare choices during emergencies.
  • Business continuity: Prevents disruption in financial and legal transactions.

Types of Power of Attorney Forms

In India, POAs can be categorised based on their scope and purpose:

  1. General Power of Attorney (GPA): Grants broad powers to the agent for financial, property, and legal affairs.

  2. Durable Power of Attorney: Remains valid even if the principal becomes mentally incapacitated.

  3. Special/Limited Power of Attorney (SPA): Authorises the agent to perform only specific tasks, such as selling a property.

  4. Medical Power of Attorney: Gives authority to make healthcare-related decisions if the principal cannot.

  5. Springing Power of Attorney: Becomes effective only upon a particular event, such as illness or absence.

Each type has its unique purpose, making it important to choose based on your specific requirement.

Structure of a Power of Attorney Document

A legally valid POA must include certain essential elements:

  • Identification of Parties: Full details of the Principal and Attorney.
  • Powers Granted: Clearly defined scope of authority.
  • Validity Duration: Period for which the POA remains effective.
  • Termination Conditions: Events that end the POA (e.g., completion of the task, revocation, or death).
  • Signatures and Witnesses: Both parties must sign, and witnesses should attest.
  • Notarisation/Registration: Depending on the type of POA, notarisation or registration with the sub-registrar may be required for enforceability.

Format of Power of Attorney

A standard POA format in India typically includes:

  1. Title: “Power of Attorney”
  2. Details of Principal and Agent: Names, addresses, and identification.
  3. Recitals: Background and reasons for creating the POA.
  4. Grant of Powers: Specific rights and authority granted.
  5. Validity Clause: Duration or conditions of applicability.
  6. Signature and Date: Signed by principal and agent.
  7. Witness Signatures: At least two witnesses.
  8. Notarisation/Stamping: To comply with legal requirements.

General Power of Attorney vs Special Power of Attorney

Aspect General Power of Attorney Special Power of Attorney
Scope Broad- covers multiple financial, legal, and property-related matters Limited- specific task only
Purpose Suitable for ongoing management of affairs Ideal for one-time transactions (e.g., property sale)
Convenience Offers flexibility and continuity Restricts misuse due to limited scope
Termination Can be revoked anytime by the principal or by death/incapacity Terminates automatically upon task completion

Choosing between GPA and SPA depends on whether you need long-term authority or task-specific delegation.

Key Considerations for a Power of Attorney

When creating a POA, keep the following in mind:

  • Select a trustworthy agent: Ensure the person is reliable and capable.
  • Define scope clearly: Avoid vague language that may lead to misuse.
  • Seek legal advice: Especially for property-related or durable POAs.
  • Register where necessary: For property transactions, registration with the sub-registrar is mandatory.
  • Know revocation rights: Understand how to cancel or modify your POA if required.

How to Revoke a Power of Attorney

A Power of Attorney is not permanent; you can revoke it at any time as long as you are competent.

Steps to revoke a POA:

  1. Draft a revocation notice in writing, stating that the authority granted is withdrawn.
  2. Inform the attorney-in-fact directly about the revocation.
  3. Notify concerned parties (banks, registrars, institutions) to avoid unauthorised use.
  4. Register the revocation deed with the sub-registrar if the original POA was registered.
  5. Public announcements (in newspapers) are advisable to ensure wide awareness and prevent misuse.

Frequently Asked Questions (FAQs)

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Private Limited Company
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  • Service-based businesses
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  • 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

Is a Power of Attorney created online legally valid in India?

Yes, a Power of Attorney (POA) drafted online is legally valid in India as long as it meets all legal requirements:

  • It must be appropriately drafted with precise details of the principal and agent.
  • It should be signed by the principal in the presence of at least two witnesses.
  • For certain transactions (like property matters), the POA must be notarised or registered with the Sub-Registrar to be enforceable.

When is a Power of Attorney required to be registered?

Registration of a POA is mandatory in specific cases, such as:

  • When the POA relates to the transfer of immovable property (sale, lease, mortgage, etc.).
  • If required under state laws (stamp duty and registration rules differ by state).
  • For durability and enforceability, registration is generally recommended even if not compulsory.

In other cases, notarisation alone may suffice.

What is the authentication process for Power of Attorney documents?

The authentication process includes:

  1. Drafting the POA clearly stating powers and scope.
  2. Stamping as per state laws (value varies across states).
  3. Execution (signing) by the principal in front of two witnesses.
  4. Notarisation before a notary public for legal credibility.
  5. Registration at the local Sub-Registrar’s office if it relates to property or long-term authority.

If the POA is executed abroad, it must be authenticated by the Indian Consulate/Embassy and then stamped/registered in India.

Is it safe to store my Power of Attorney document digitally?

Yes, it is safe if done carefully:

  • Store in secure cloud storage or encrypted drives.
  • Share only with trusted individuals (like your agent or lawyer).

A digital copy is helpful for reference, but the original stamped/notarised/registered document is usually required for official use.

Can I edit my Power of Attorney PDF after it has been created?

Technically, you can edit the text of a POA PDF using editing tools. However, once a POA has been executed (signed, stamped, or registered), you cannot legally alter it by editing the file.

Swagatika Mohapatra

Swagatika Mohapatra is a storyteller & content strategist. She currently leads content and community at Razorpay Rize, a founder-first initiative that supports early-stage & growth-stage startups in India across tech, D2C, and global export categories.

Over the last 4+ years, she’s built a stronghold in content strategy, UX writing, and startup storytelling. At Rize, she’s the mind behind everything from founder playbooks and company registration explainers to deep-dive blogs on brand-building, metrics, and product-market fit.

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Related Posts

What is Partnership? Features, Types and Benefits

What is Partnership? Features, Types and Benefits

A partnership is a formal arrangement where two or more parties come together to manage and operate a business. Partnerships are a common way for individuals and entities to pool resources, expertise, and efforts to achieve shared goals. They can take various forms, such as general and limited liability partnerships, each with unique characteristics.

Unlike running a business alone, a partnership fosters teamwork, shared decision-making, and mutual responsibility. In a partnership, profits, liabilities, and operational responsibilities are typically shared among partners according to the terms of a partnership agreement.  It’s a model built on trust and cooperation, making it a popular choice for startups and growing businesses.

In this blog, we’ll explore partnerships, their key features, and why they’re an attractive option for many entrepreneurs looking to build something together.

Table of Contents

Features of Partnerships

Partnerships are defined by several key features:

  • Shared Responsibilities: Partners collaborate on business operations, contributing their expertise, resources, and capital to achieve mutual goals.
  • Shared Resources: Partnerships allow the pooling of financial and intellectual resources, enhancing operational efficiency.
  • Shared Goals: Partners align on strategic objectives to grow the business and share in its success.
  • Flexibility: Partnerships can be structured to suit specific needs, from informal agreements to formal legal contracts.
  • Decision-Making Process: Decision-making is often a collective process, emphasising the importance of trust and mutual understanding among partners.
  • Legal Agreements: While partnerships can be informal, formal agreements provide clarity on roles, profit-sharing, and conflict resolution.
  • Dissolution: Partnerships can be dissolved legally if required, often guided by the terms of the agreement or applicable laws.

Types of Partnerships

There are various types of partnerships, each serving different purposes and offering distinct advantages. For-profit partnerships generally fall into three main categories:

1. General Partnership

In a general partnership, all partners share equal responsibility for the business’s liabilities and profits. Each partner is personally liable for the business’s debts, making it crucial to draft a partnership agreement that outlines profit-sharing, roles, and responsibilities. 

For example, two entrepreneurs starting a retail business together would likely form a general partnership.

2. Limited Partnership

Limited partnerships (LPs) feature both general partners and limited (or silent) partners. General partners manage the business and assume entire liability, while limited partners contribute capital and enjoy liability protection up to the amount they invest. 

An example might be a real estate development project funded by silent investors.

3. Limited Liability Partnership

Limited liability partnerships (LLPs) protect partners’ personal assets by limiting liability for business debts. LLPs are particularly common in professions like law and accounting, where personal liability is a significant concern. 

For example, in a law firm LLP, equity partners own a share of the business, while salaried partners do not hold ownership but receive bonuses tied to performance.

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What is the Partnership Act 1932?

The Partnership Act of 1932 is a legal framework governing partnerships in India. Key provisions include:

  • Definition and Formation: Outlining what constitutes a partnership and the requirements for its formation.
  • Rights and Duties: Defining the rights, responsibilities, and liabilities of partners.
  • Partnership Agreements: Emphasising the importance of clear agreements to avoid disputes.
  • Dissolution: Providing guidelines for legally dissolving a partnership.

The Act ensures transparency and fairness in business partnerships, making it a crucial reference for anyone entering into such arrangements.

Advantages and Disadvantages of Partnerships

Advantages

  • Easy to establish and operate
  • Shared financial and intellectual resources
  • Tax benefits, such as pass-through taxation
  • Flexible business structure

Disadvantages

  • Unlimited liability for general partners
  • Potential for conflicts among partners
  • Limited lifespan unless explicitly agreed otherwise
  • Shared profits

How to Form a Partnership?

Below are the steps for the partnership registration process:

  1. Draft a Partnership Agreement: Clearly outline roles, profit-sharing, and dispute-resolution mechanisms.
  2. Register the Partnership: Depending on the jurisdiction, registration may be required.
  3. Obtain Necessary Licenses and Permits: Ensure compliance with local regulations.
  4. Set Up Operations: Establish the business’s infrastructure and processes.

Partnerships vs. Companies

Choosing the right business structure is one of the most critical decisions for any entrepreneur. While partnerships and companies are both popular choices, they differ significantly in terms of ownership, liability, management, and regulatory requirements. 

Each structure has its own advantages and challenges, making it essential to understand which one aligns best with your business goals.

Feature Partnership Company
Legal status No separate legal entity Separate legal entity
Liability Unlimited (except LLPs) Limited
Profit distribution Shared among partners Distributed as dividends
Management Managed by partners Managed by the board of directors

Partnerships are generally more flexible but come with higher personal risk, whereas companies provide greater liability protection but involve more regulatory requirements.

Related Read: Private Limited Company Vs. Limited Liability Partnerships (LLP)

Frequently Asked Questions

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

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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

How Does a Partnership Differ From Other Forms of Business Organisation?

A partnership differs from other business structures like sole proprietorships, limited liability companies (LLCs), and corporations primarily in ownership, liability, and decision-making.

What Is a Limited Partnership vs. a Limited Liability Partnership?

A Limited Partnership (LP) and a Limited Liability Partnership (LLP) are two distinct types of partnerships:

  • Limited Partnership (LP):
    • Composed of general partners who manage the business and have unlimited liability and limited partners who contribute capital but have liability only up to their investment.
    • Common in investment ventures where limited partners provide funds, and general partners manage the operations.
  • Limited Liability Partnership (LLP):
    • All partners have limited liability, protecting them from personal responsibility for the business’s debts.
    • Ideal for professional businesses like law firms or accounting firms, where partners share management duties but seek protection from personal liabilities.

Do Partnerships Pay Taxes?

Partnerships themselves do not pay income taxes. Instead, they are considered pass-through entities, meaning that the partnership’s profits and losses are passed through to individual partners. 

Each partner reports their share of the partnership’s income on their personal tax return, where they are taxed based on their portion of the profit.

What Types of Businesses Are Best suited for Partnerships?

Partnerships are well-suited for businesses that benefit from shared expertise and resources. Some ideal types include:

  • Professional Services: Law firms, accounting firms, and medical practices, where partners bring specialised skills.
  • Family Businesses: Small family-owned businesses where partners are trusted to work together.
  • Creative Industries: Advertising agencies, design firms, or production companies that require collaborative efforts.
  • Startups: Early-stage businesses that need multiple people to contribute capital, ideas, and effort but do not want the complexity of a corporation.

What is a partnership, and how does it work?

A partnership is a business arrangement where two or more individuals share ownership and management responsibilities, pooling resources to run the business. The partners agree on how profits, losses, and responsibilities will be shared, typically outlined in a partnership agreement.

The partnership can be structured in various ways, such as general partnerships or limited partnerships, depending on the desired level of liability and control. 

What are the different types of partnership working?

There are several types of partnership structures based on liability and management involvement:

  • General Partnership
  • Limited Partnership (LP)
  • Limited Liability Partnership (LLP)
  • Joint Venture

Who is a secret partner?

A secret partner is a business partner who contributes capital and shares in the profits and losses but does not take part in the day-to-day management or operations of the business. Unlike a dormant or silent partner, a secret partner’s identity is not disclosed to the public or clients but is still legally bound by the partnership’s obligations and liabilities.

How many types of partners are there?

In a partnership, there are four main types of partners:

  1. Active Partner: Actively participates in the management of the business and shares in both profits and liabilities.
  2. Sleeping (or Dormant) Partner: Invests capital but does not participate in day-to-day management; however, they share in profits and losses.
  3. Secret Partner: A partner whose identity is kept hidden from the public but participates in the partnership’s activities and shares in profits and liabilities.
  4. Limited Partner: A partner who contributes capital but has limited liability, meaning they are only liable up to the amount they have invested in the business.

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
rize image

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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Company Status Strike-Off Meaning Explained

Company Status Strike-Off Meaning Explained

When a company stops operating or fails to comply with statutory requirements, it risks being removed from the official records maintained by the Registrar of Companies (ROC). This process is known as strike off, and it marks the formal end of a company’s existence. 

In this blog, we will explain the meaning of strike off, its legal framework, the reasons it happens, and how companies can voluntarily or involuntarily undergo this process. We’ll also cover the required documents, procedures, and implications for businesses.

Table of Contents

What is the meaning of “Strike-Off Company”?

A strike-off refers to the process of removing a company’s name from the ROC registry, leading to its legal dissolution. Once struck off, the company ceases all operations and loses its status as a corporate entity. If any assets remain, they are transferred to the government to clear outstanding liabilities. After debts are settled, any residual proceeds may be distributed among shareholders.

It’s important to note that a struck-off company cannot be restored to its previous status. However, a new company can be incorporated under the same name provided it complies with all legal requirements.

Company Status: Strike-Off

When a company’s status is shown as “strike-off”, it means that the ROC has officially removed it from the register of companies. This action results in:

  • Immediate cessation of all business activities.
  • Transfer of assets to the government to settle any unpaid dues.
  • Legal dissolution of the entity, meaning it can no longer enter into contracts or pursue business activities.

A company that is struck off loses its identity and cannot function unless it is re-registered under special legal provisions.

Act Dealing with the Strike-Off of a Company

The process of striking off a company is governed by the Companies Act, 2013, specifically Sections 248 to 252, along with the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.

Strike off can occur in two ways:

  1. Voluntary Strike-Off – Initiated by the company’s directors when it no longer operates.
  2. Registrar-Initiated Strike-Off – Initiated by the ROC when the company is inactive, non-compliant, or fails to file mandatory returns and reports.

Reasons for Company Strike-Off

Companies may be struck off by the ROC for several reasons, including:

  • Prolonged Inactivity: The company has not conducted any business or operations for a significant period.
  • Non-Compliance: Failure to file annual returns, financial statements, or pay regulatory fees.
  • Fraudulent or Illegal Activities: Engaging in unlawful practices that violate corporate regulations.
  • No Assets or Liabilities: The business has ceased operations and holds no significant assets or obligations.
  • Non-Communication: Ignoring notices sent by the ROC or not responding to compliance queries.

Types of Company Strike Offs

There are two primary types of strike-offs recognised in India:

  1. Voluntary Strike Off
    The company’s directors apply for a strike off when they decide to wind up operations. It requires clearing all dues and obtaining approval from shareholders and creditors.
  2. Registrar-Initiated Strike Off
    The ROC initiates the process when the company fails to meet statutory requirements, such as not filing returns for consecutive years or not maintaining registered offices.

Both types of strike-offs lead to the dissolution of the company, but the processes and conditions differ. Voluntary strike-off is usually smoother, while ROC-initiated strike-off may involve penalties and investigations.

Documents/Details Required for Voluntary Strike-Off

To apply for voluntary strike off, companies must submit several documents and details, including:

  • Shareholder Consent( Approval from at least 75% of shareholders)
  • No Objection Certificate (NOC) from Creditors 
  • Past Financial Filings( Copies of AOC-4 (annual financial statements), MGT-7 (annual returns), and income tax returns (ITR))
  • Director Identity and Residential Proof 
  • Memorandum and Articles of Association (MOA/AOA)
  • Litigation Details
  • Bank Closure Letter Affidavits 

Procedure for Submitting a Voluntary Strike-off Application

The step-by-step process for voluntary strike off includes:

  1. Board Meeting: Conduct a board meeting to pass a resolution to initiate strike off.
  2. Clear Liabilities: Settle all debts, loans, and statutory obligations.
  3. Shareholder Consent: Obtain at least 75% shareholder approval through a special resolution.
  4. File Form MGT-14: Submit the special resolution to the ROC within 30 days of passing it.
  5. Submit Form STK-2: Provide all required documents, including financial records and NOCs, to the ROC for final approval.

Once approved, the company’s name is removed from the register and officially dissolved.

Frequently Asked Questions (FAQs)

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Frequently Asked Questions

How to check the company’s strike-off date?

You can check the strike-off date of a company by accessing the Ministry of Corporate Affairs (MCA) portal:

  1. Visit the MCA website.
  2. Go to the “MCA Services” section and select “View Company or LLP Master Data.”
  3. Enter the CIN (Corporate Identification Number) or company name.
  4. Check the company’s status- if it is “Strike- Off,” the details page will mention the date of removal from the register.
  5. Additionally, you can view official gazette notifications where strike-off dates are published.

What are the advantages of a company strike-off?

Strike off offers several benefits for both the company and regulatory authorities:

  1. Legal Closure: It formally ends the company’s existence, protecting directors and shareholders from future liabilities.

  2. Debt Resolution: Remaining assets are transferred to the government to settle outstanding debts.

  3. Compliance Maintenance: Helps in maintaining a clean registry by removing inactive or non-compliant entities.

  4. Cost Savings: Eliminates ongoing compliance costs like annual filings, audits, and penalties.

  5. No Operational Risks: Prevents dormant companies from being misused for fraudulent activities.

Is a company strike-off necessary to maintain ethical business standards?

Yes, strike off plays an important role in maintaining ethical and transparent business practices. It ensures that:

  • Defunct or inactive companies are removed from public records.
  • Fraudulent or shell entities cannot misuse the corporate structure.

Can a struck-off company be revived?

A struck-off company can be revived, but only through specific legal procedures:

  1. An application can be filed with the National Company Law Tribunal (NCLT) or the appropriate court seeking restoration.
  2. The company must prove that it was struck off without due cause or that it is solvent and able to meet liabilities.
  3. All pending filings, fees, and penalties must be cleared before restoration.
  4. Courts may allow revival in cases where business continuity is justified.

However, revival is not guaranteed and depends on the facts of the case and the decision of the tribunal or court.

Is the strike-off process different across different states in India?

No, the strike-off process is governed by central laws, specifically the Companies Act, 2013 and its rules, and is therefore uniform across India. The Registrar of Companies (ROC) offices in each state follow the same procedures laid out by the Ministry of Corporate Affairs (MCA).

Sarthak Goyal

Sarthak Goyal is a Chartered Accountant with 10+ years of experience in business process consulting, internal audits, risk management, and Virtual CFO services. He cleared his CA at 21, began his career in a PSU, and went on to establish a successful ₹8 Cr+ e-commerce venture.

He has since advised ₹200–1000 Cr+ companies on streamlining operations, setting up audit frameworks, and financial monitoring. A community builder for finance professionals and an amateur writer, Sarthak blends deep finance expertise with an entrepreneurial spirit and a passion for continuous learning.

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