Company Incorporation or partnership – Part 2

There was a query in an earlier post in this blog: Company incorporation or partnership which was specifically related to how much starting a company would approximately cost the founders.

As this is one question that is on the top of the mind of many wannabe entreprenerus, it is worth a full post and not just a response. There are actually different components to the cost, there is the initial, onetime statutory  fee, there is a recurring fee and there is also the fee you pay to an expert to help you with the registration process. The statutory fee is dependent on the amount of capital one wants to raise and use in the business.

Praveen Jain, an entrepreneur, who has been through the process of registering his company has this to say. "There are two aspects to the regulatory costs in setting up a company. One is to create a company and the other is to make the company business ready.

While a company can be incorporated with Registrar of Companies, you would also need other regulatory approvals, based on nature of business, like VAT, Service Tax, PAN, TAN, Import Export Code, PF/other labour law registrations, local registrations under shops and establishments Act to make it business ready. The minimum stipulated capital for starting a company is Rs. 1 Lakh. Certain regulatory authorities stipulate a deposit, e.g VAT deposit of Rs.10,000. The indicative total amount required to setup a company including the most of the above regulatory approvals/registrations would start from around 50-60K. If your business requires certain environmental approvals, those fee would be additional. The professional fee would depend on the range of registrations required."

I hope this answers some of the queries related to starting a business, particularly related to founding a company.

Anjana Vivek
About Anjana Vivek 45 Articles
Anjana Vivek, Director, VentureBean Consulting Private Limited, is a consultant, teacher, writer; CA & visiting faculty at IIM(B). Her specialties are business models, funding strategy, entrepreneurship, M&A and valuation.

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