Procedure to form a company in India and Cost analysis - Professionals - Legal - TIK Share
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Procedure to form a company in India and Cost analysis

CA Pulkit Sharma


The dream of every businessman is to own a company. Logically anyone can have a company of his own. If you have 1 Lakh, you can always own a company in India. But owning a company is different from owning a successful company.

Before I explain the procedure to incorporate a company in India, let us answer some general questions that one should always ask himself before going for a company.

  1. Do I really need a company to run Business?
  2. Why a company and not LLP?
  3. Who will be the shareholders, and directors of company?
  4. Can I afford the cost of managing a company?

If answer to above questions is yes or explanatory, your next step is to consult a Chartered Accountant to incorporate a company. The procedure to Incorporate a private limited company is as follow:


First Step

  1. Decide the Name of company (Think of at least 5 names)
  2. Decide the Business Address of Company.
  3. List down the Businesses you intend to carry on through company
  4. Decide the shareholders (Minimum 2) and their holding percentage and also name of directors (Minimum 2).

Second Step (Total Cost Approximately 2000)

  1. Apply for the DIN (Director Identification Number).  You would have already decided the names of Directors; the next step is to obtain the DIN for them, if they don’t have it already. DIN is a unique number given by MCA/ROC to every director to track his activities as a director.

Documents required to Obtain DIN are Address Proof, ID Proof(PAN), One Photo, notarized Affidavit.

     2. Obtain Digital Signature of at least one Director

Third Step (Cost ranges from 10,00 to 50,00, depending on professional fees)

File form 1A with ROC to check name availability of Company. Once name is available proceed to next step.

Fourth Step (Cost ranges from 10,000 to 20,000, Depending on Professional fees and Paid capital)

  1. File form 1 with ROC, this form is to Register the company and pay applicable fees. And applicable stamp Duty .
  2. File form 18 along with form 1, form 18 is to intimate the registered office of the company.
  3. Also file form 32, form 32 is file to appoint Directors and managers of company.


Once all these forms are filed and approved by ROC (Registrar of Companies), ROC will issue the Incorporation certificate. Once Certificate is issued, you can carry the business on the name of Company.

Last Step

  1. Within 30 days of Registration of Company, the following compliances has to be fulfilled:
  2. Appoint an Auditor(Chartered Accountant)
  3. Open a Corporate Bank Account
  4. Decide the Accounting year of Company


Once all the steps are covered, next thing is to manage your company. Different fixed costs that company has to incur even if no business is done are:

  1. Annual Audit Charges
  2. Annual Accounts Filing with ROC

Have any doubt in managin a company, Discuss it in Tikshare forum. And also article Advise for Startups- How to Set-up Your Start-up is recommanded.