Pranav Singhal
The real cost of a private limited company is the twelve months after incorporation
The Rs 1,499 headline is the smallest number in your first year. Here is the statutory calendar nobody shows you at signup, with the penalty math for missing each line.
- incorporation
- compliance
- pvt-ltd
- penalties
- first-year
The advertised price of incorporating a private limited company in India is Rs 1,499 to 2,999. The actual cost of the first year is Rs 15,000 to 40,000 more than that, and it is not optional. The gap is statutory work that lands in the twelve months after incorporation, and it lands on every company: a company with zero revenue and zero transactions owes almost all of it. Day-one government fees, including stamp duty by state, are a separate arithmetic.
The incorporation headline is not a lie. It is just the smallest number in the sequence, chosen because it is the one you compare providers on. Here is the full sequence.
The first-year calendar, with what missing it costs
| Obligation | Deadline | Fee | What missing it costs |
|---|---|---|---|
| Appoint the first auditor (board) | 30 days from incorporation | Rs 0 | Cascades into everything below |
| ADT-1 (auditor appointment filing) | 15 days from the appointing meeting | Rs 300* | Late fee multiplies 2x to 12x |
| INC-20A (commencement of business) | 180 days from incorporation | Rs 300* | Rs 50,000 on the company, Rs 1,000 per day per officer up to Rs 1 lakh. The ROC can strike the company off. |
| Statutory audit | Every year | Auditor’s fee, Rs 15,000 to 40,000 | Cannot file AOC-4 without it |
| AGM | By 30 September | Rs 0 | Up to Rs 1 lakh plus Rs 5,000 per day continuing |
| AOC-4 (financial statements) | 30 days from AGM | Rs 300* | Rs 100 per day. No cap. |
| MGT-7 (annual return) | 60 days from AGM | Rs 300* | Rs 100 per day. No cap. |
| DIR-3 KYC (each director) | 30 September | Rs 0 on time | Rs 5,000 flat per director, and the DIN deactivates, freezing every filing that director signs |
| Income tax return | 31 October (audit case) | Rs 0 | Interest at 1% per month plus late fee |
| GST returns, if registered | Monthly or quarterly | Rs 0 | Rs 50 per day per return plus 18% interest on tax paid late |
*MCA form fees scale with authorised capital; Rs 300 is the figure at Rs 1 lakh to 5 lakh. The pattern to notice: the government fees are trivial, Rs 1,200 to 1,500 for the whole year. The real numbers are the audit fee and the penalties.
Three lines worth reading twice
The statutory audit is mandatory at zero revenue. This surprises almost every first-time founder. An LLP is only audited above Rs 40 lakh turnover or Rs 25 lakh contribution. A private limited company is audited every year, from year one, even if the only transaction in the books is the incorporation itself. The audit fee, Rs 15,000 to 40,000 for a small company, is the single largest line in your first year, and no incorporation package includes it, because legally none can: Section 144 of the Companies Act bars the firm that keeps your books from signing your audit. Anyone bundling “audit” into a cheap compliance package is either not doing your books or not doing your audit. That exclusion is also on our pricing page, and in the CA firm comparison.
INC-20A is the trap with a strike-off at the end. Before your company can commence business, a director must declare that every subscriber has actually deposited their share money, with the bank statement attached, within 180 days. Miss it and the penalty is Rs 50,000 plus per-day officer penalties, and the Registrar can remove your company from the register. The reason founders hit this one is upstream: the subscription amount was set carelessly at incorporation (more on that in authorised versus subscribed capital), and 180 days pass faster than anyone expects.
AOC-4 and MGT-7 have no cap. Most late fees stop somewhere. These two run at Rs 100 per day each, forever. A company that goes quiet for two years and then needs to be cleaned up for a fundraise can owe more in late fees than it ever spent on accounting. This is the arithmetic behind every “we found out during due diligence” story.
How to read an incorporation quote
Ask one question: what is my twelve-month total? Not the price of the registration, the price of the first year of being registered. A provider who has done this properly can answer with a table like the one above, split into what the government charges, what third parties charge, what they charge, and what is explicitly not included, with the audit fee named. A provider who answers with the headline price plus “compliance packages start at…” is deferring the real number to a month when you are no longer comparing providers.
We built our incorporation flow to show the year-one total before you pay anything, with the day-one number as a subset of it. Not because it makes the number smaller. It makes it bigger. But it is the number you are actually signing up for, and we would rather you hear it from us in September than from the ROC in March.