The true cost of a private limited company in India: year one and every year after

The government charges nothing to register a private limited company with authorised capital up to ₹15 lakh. That sentence is true, and it is the reason so many advertisements can quote a price of ₹999 or ₹1,999. It is also why so many first-time founders are surprised in month seven, when the auditor's invoice arrives for a company that has not yet issued an invoice of its own.

A private limited company is the right structure for most businesses that intend to raise money or issue options. It is also the most expensive structure in India to keep alive, and this is the complete bill, from incorporation to closure. The figures are the official fees and the professional ranges we see in the market in late 2026; where a figure varies by state or by provider we say so.

What does it cost to register a private limited company?

For a company with two directors and ₹1 lakh of authorised capital, the government's own charges come to between about ₹1,200 and ₹8,000 depending on the state, plus ₹1,600 to ₹5,200 for two digital signature certificates, plus the professional fee. Most of the variation is stamp duty.

The Ministry of Corporate Affairs has charged no fee for the SPICe+ incorporation form, the memorandum or the articles since 18 March 2019 for authorised capital up to ₹15 lakh. Three small items are charged through the form: ₹66 for the PAN, ₹65 for the TAN, and ₹1,000 for name reservation if the name is reserved separately in Part A before the main filing (a second attempt costs another ₹1,000). Director identification numbers for up to three directors are allotted through the form at no cost.

Stamp duty is a state levy on the memorandum, the articles and the form itself, collected electronically by the Ministry on the state's behalf. It varies widely, and it has gone up in three large states since 2024.

These are the totals commonly quoted by practitioners from the Ministry's e-stamp table and the state amendments; the exact figure moves with authorised capital, and in Karnataka a ₹10 lakh capital company pays the same ₹5,000 on its articles as a ₹1 lakh one. For a Maharashtra company with ₹10 lakh authorised capital the articles alone are ₹3,000.

Each director needs a Class 3 digital signature certificate to sign the incorporation forms and every filing after that. In 2026 a two-year certificate with its USB token costs between ₹800 and ₹2,600 from the licensed certifying authorities and their resellers, and a company with two directors needs two of them.

The professional fee is the only negotiable line. Online aggregators charge ₹2,000 to ₹4,000 for the filing work; local firms charge ₹8,000 to ₹15,000 and usually include the post-incorporation steps below. GST at 18 percent applies to the professional fee and is often not in the advertised number.

What do the ₹999 and ₹1,999 offers include?

They include the professional fee for the filing, and sometimes a certificate or two. They do not include the government's charges, and the fine print says so.

One widely advertised ₹1,999 plan describes itself as "₹1,999 + Govt Fees" and, further down the page, lists the name reservation fee of ₹1,000, stamp duty of "₹135 to ₹15,020" depending on state and capital, and digital signatures at ₹2,500 each. Another well-known provider advertises "starting from ₹2,899" without itemising what the number covers and notes additional charges for faster processing. A third charges ₹4,999 including two certificates but adds that government fees "may vary based on authorised capital and stamp duty". A fourth shows no price at all on the page.

Each is a price for one component of a package that has at least five. A founder comparing quotes should ask the same six questions of every provider: Are government fees and stamp duty for my state included or extra? How many digital signatures, and at what price each? How many name reservation attempts? Is GST included in the quoted fee? Which post-incorporation filings (INC-20A, auditor appointment, share certificates) are included? And what is the price of the first year's audit and annual filings, because that is the bill that matters.

What must be done in the first 180 days, and what does it cost?

A new company has four statutory tasks in its first six months.

The first board meeting must be held within 30 days of incorporation under Section 173. It costs nothing but it must be minuted, because the auditor's appointment and the opening of the bank account are resolved there.

The first auditor must be appointed by the board within 30 days under Section 139(6), failing which the members must do it within 90 days, and the appointment is notified in Form ADT-1. The filing fee is ₹300 for a company with authorised capital between ₹1 lakh and ₹5 lakh. Every company must have a statutory auditor regardless of turnover; a private limited company with no revenue still needs audited accounts.

Share certificates must be issued within two months of incorporation under Section 56(4), and stamp duty is payable on them at the state's rate on the paid-up value. Subscribers must pay their subscription money into the company's bank account before the next step.

The declaration of commencement of business, Form INC-20A, must be filed within 180 days under Section 10A, confirming that the subscription money has been received. The fee is ₹300. The penalty for missing it is ₹50,000 on the company and ₹1,000 a day on every officer in default up to ₹1 lakh, and the Registrar may strike the company off. The small-company penalty relief in Section 446B does not apply to this one.

If the registered office was not finalised at incorporation, Form INC-22 is due within 30 days, with another ₹300. Statutory registers (members, directors, charges, and so on) must be opened and maintained.

A company that uses a professional for all of this should expect to pay ₹3,000 to ₹10,000 for the first-180-day package on top of incorporation; most local firms bundle it.

What does a private limited company cost every year?

A company with no turnover, no employees and no GST registration should budget ₹15,000 to ₹40,000 a year for audit and annual filings, almost all of it professional fees. A company with turnover, staff and GST pays considerably more, in proportion to the work.

The statutory fees themselves are small. For a company with authorised capital between ₹1 lakh and ₹5 lakh each of the annual forms costs ₹300.

Add to this the work that depends on the business. A company that deducts tax at source needs a TAN, monthly deposits by the 7th, and quarterly returns (from April 2026, the forms that replaced 24Q and 26Q under the Income-tax Rules 2026). A company registered for GST, which becomes compulsory at ₹40 lakh of goods turnover or ₹20 lakh of services (₹10 lakh in the special category states), files GSTR-1 and GSTR-3B monthly, or quarterly under the QRMP scheme if annual turnover is up to ₹5 crore, plus the annual return. A company whose turnover crosses ₹1 crore needs a tax audit, unless cash receipts and payments are each within five percent of the total, in which case the limit is ₹10 crore; the audit report form changed to Form 26 for tax year 2026-27. A company with 20 employees must register for provident fund, and one with 10 employees (20 in Maharashtra) for employees' state insurance where wages are within ₹21,000. In Maharashtra the company pays professional tax of ₹2,500 a year on its own enrolment and deducts it from salaries; Karnataka has a similar regime. Most states require a Shops and Establishments registration within 30 days of starting.

In professional fees, the market in late 2026 looks like this. Bare ROC compliance packages that exclude the audit run from about ₹3,000 to ₹15,000 a year. Audit plus ROC filings for a small company runs ₹15,000 to ₹40,000. Adding the income tax return, TDS returns and GST returns to a monthly or quarterly rhythm typically takes a small trading company to ₹40,000 to ₹1,00,000 a year, and a company with payroll beyond that. The answer to "how much will it cost" depends on volume, and a provider who quotes one number for every company has not asked about it.

What happens when the calendar slips?

Penalties are the largest cost of a neglected company, and since 2018 they have been designed to make delay cost more than compliance.

The annual forms, AOC-4 and MGT-7A, carry an additional fee of ₹100 per day per form with no upper limit, from 1 July 2018. A company one year late on both forms owes ₹73,000 in additional fees before anything else. Separately, the Registrar can adjudicate penalties under Section 137(3) and Section 92(5): ₹10,000 plus ₹100 a day up to ₹2 lakh on the company, and ₹10,000 plus ₹100 a day up to ₹50,000 on each officer in default. In FY25 the Ministry levied ₹109 crore of such penalties on 1,066 companies. Three consecutive years without filing disqualifies every director for five years under Section 164(2), and the Registrar strikes the company off while the liability of its directors continues.

DIR-3 KYC missed by 30 September costs ₹5,000 per director and deactivates the DIN, which means the director cannot sign the company's own annual filings until it is paid. The INC-20A penalty is set out above. Other MCA forms filed late pay a multiple of the normal fee, from two times to twelve times depending on the delay.

On the tax side, a late income tax return costs ₹5,000 under Section 234F (₹1,000 where total income is within ₹5 lakh), plus interest on any tax due. A late TDS statement costs ₹200 a day under Section 234E, capped at the tax involved, with a further penalty of ₹10,000 to ₹1 lakh possible under Section 271H. A late GST return costs ₹50 a day (₹20 for a nil return), capped at between ₹500 and ₹10,000 per return depending on turnover, with interest at 18 percent on unpaid tax, and since July 2025 a return more than three years overdue cannot be filed at all.

The typical failure behind these penalties is a company that stopped trading, whose founders assumed nothing more was needed, and who learn three years later that the exit now costs several lakh rupees and a five-year ban. Our case study on the 2017 strike-off, when the Ministry removed 2.24 lakh companies and disqualified 3.09 lakh directors, shows how that plays out.

How does a private limited company compare with an LLP or a proprietorship?

A limited liability partnership costs a fraction of a company to run at low turnover, mainly because it needs no audit until turnover exceeds ₹40 lakh or partners' contribution exceeds ₹25 lakh. A proprietorship costs nothing to form and nothing to maintain beyond the proprietor's own tax return.

An LLP files two annual forms: Form 11, the annual return, by 30 May, and Form 8, the statement of accounts and solvency, by 30 October. The fee is ₹50 each for an LLP with ₹1 lakh of contribution. Since April 2022 the late fee for a small LLP rises in slabs from one to fifteen times the normal fee and then ₹10 a day beyond 360 days, which is far gentler than ₹100 a day. There are no board meetings, no share certificates, no DPT-3, and designated partners file the same annual KYC as directors. Incorporation stamp duty on the LLP agreement varies by state and contribution. A small services or real estate LLP typically runs on ₹5,000 to ₹15,000 a year of professional fees until it needs an audit.

A one person company has the same incorporation and annual bill as a private limited company, including the audit from year one. A proprietorship has no registration beyond the licences its trade needs, no audit below ₹1 crore of turnover, and access to presumptive taxation at six or eight percent of turnover up to ₹2 crore (₹3 crore where cash receipts are within five percent).

What the extra money buys with a private limited company is specific: shares that can be issued to investors and employees, limited liability for shareholders, the structure that venture funds, foreign parents and most corporate customers insist on, and a separate legal identity that survives its founders. A founder who needs none of those in the next three years is paying for a capability they will not use, and a founder who needs any one of them has no real alternative.

What does it cost to close a private limited company?

Closing properly costs ₹10,000 in government fees plus the cost of bringing filings up to date, and takes about three to six months.

A company that has not started business within a year of incorporation, or has not carried on business for two financial years, can apply for strike-off in Form STK-2. The fee has been ₹10,000 since May 2019. The application needs an affidavit from every director, an indemnity bond, and a statement of accounts certified by a chartered accountant not more than 30 days old, and it cannot be filed until all overdue annual returns up to the year the company stopped business have been completed with their late fees. Applications are processed by the Centre for Processing Accelerated Corporate Exit, which the government says is taking 70 to 90 days; practitioners quote three to six months end to end. A company that expects to use the entity again can instead apply for dormant status under Section 455, which keeps the registration alive with lighter filings.

Before signing any incorporation quote

Get the six answers above in writing: the professional fee and whether GST is included; the government fees and stamp duty for your state at your authorised capital, as a figure; the number and price of digital signatures; the number of name attempts; which post-incorporation filings are included; and the price and scope of year one's audit, annual filings, DIR-3 KYC and income tax return.

Frequently asked questions

What is the government fee for private limited company registration in India?

Nil for the SPICe+ form, memorandum and articles where authorised capital is up to ₹15 lakh, since March 2019. The company pays ₹66 for PAN and ₹65 for TAN through the form, ₹1,000 if the name is reserved separately, and state stamp duty that ranges from about ₹135 in Haryana to about ₹6,020 in Karnataka at ₹1 lakh of capital.

How much does it cost to maintain a private limited company every year?

For a company with no turnover, about ₹15,000 to ₹40,000 a year in professional fees for the statutory audit and ROC filings, plus about ₹600 to ₹1,200 in government filing fees. A trading company with GST, TDS and payroll should expect ₹40,000 to ₹1,00,000 or more depending on volume.

Is an audit compulsory for a private limited company with no turnover?

Yes. Section 139 of the Companies Act 2013 requires every company to appoint a statutory auditor and have its accounts audited, regardless of turnover or activity. An LLP, by contrast, needs an audit only when turnover exceeds ₹40 lakh or contribution exceeds ₹25 lakh.

What is the penalty for late filing of AOC-4 and MGT-7 or MGT-7A?

An additional fee of ₹100 per day per form with no upper limit, plus the possibility of an adjudicated penalty of ₹10,000 and ₹100 a day up to ₹2 lakh on the company and up to ₹50,000 on each officer. Three consecutive years of non-filing disqualifies the directors for five years.

How much stamp duty is payable on company registration in Maharashtra and Karnataka?

At ₹1 lakh of authorised capital, about ₹1,300 to ₹1,400 in Maharashtra, where the duty on articles rose to 0.3 percent of capital in October 2024, and about ₹6,020 in Karnataka, where the articles have attracted ₹5,000 for every ₹10 lakh of capital or part thereof since February 2024.

How much does it cost to close a private limited company?

The strike-off application in Form STK-2 carries a government fee of ₹10,000. All overdue annual filings must be completed first, with their additional fees, and the application needs an affidavit, an indemnity bond and a recent certified statement of accounts. Processing takes 70 to 90 days at the Centre for Processing Accelerated Corporate Exit, or three to six months including preparation.

Sources

Companies (Incorporation) Second Amendment Rules 2019 (G.S.R. 180(E) of 6 March 2019); Companies (Registration Offices and Fees) Rules 2014 and the Second Amendment Rules 2018; MCA e-stamp duty table; Karnataka Stamp (Amendment) Act 2023; Maharashtra Stamp (Amendment) Ordinance 2024; Tamil Nadu Stamp (Amendment) Act 2024; Companies Act 2013, Sections 10A, 12, 56, 92, 96, 137, 139, 164, 173, 248 and 455; Companies (Amendment) Act 2020; Companies (Removal of Names of Companies from the Register of Companies) Rules 2016 as amended in 2019 and 2023; MCA FAQs on DIR-3 KYC; Income-tax Act 1961, Sections 44AB, 234E, 234F and 271H, and the Income-tax Rules 2026; CBDT Circular 07/2026; CGST notifications 19/2021 and 20/2021 on late fees; EPFO and ESIC coverage thresholds; LLP (Second Amendment) Rules 2022; Lok Sabha reply of 9 February 2026 on adjudication penalties; published pricing pages of four online incorporation providers, accessed 6 October 2026.