Wednesday, 21 March 2018

Authorised Capital for Private Limited Company Registration

Every Private Limited Company, Public Limited company, OPC have to declare their capital structure at the times to Registrar of Companies (ROC). Changes in the capital structure of the company need to inform to ROC.
 
The authorized share capital is also known as Nominal Capital. Authorized capital is the maximum share capital through which a company can issue shares to its shareholders. Authorize capital is the maximum amount that shareholders can invest in the company. It can be in the form of Equity or Preference shares.
 
The Authorized capital amount is decided during company incorporation and it is mentioned in the Memorandum and Articles of Association. The amount of Authorise capital differs from company to company and subject to the change of shareholder’s approval. The company can issue shares to the maximum up to its authorized capital and not beyond that.
 

New Fees structure for Authorised Capital
The Finance Minister announced a Zero Fees structure for registration of Companies having Authorised Capital up to Rs. 10 Lakh. The Ministry of Corporate Affairs has published notification in Official Gazette of India to amend Companies (Registration Offices and Fees) Rules, 2014. The amended rule has come into force 26th of January, 2018.
Key Features of Notification
·         Launch on RUN (Reserve Unique Name)  in replacement of Form INC-1
·         No re-submission is allowed
·         The name reservation is valid for 20 days

Zero Fees for incorporation forms of companies having Authorised Capital up to Rs 10 Lakh.
·     The Ministry has amended fee structure for incorporation as stated in company amendment rules.
·         The companies which have incorporated as a small company and claimed a benefit of Zero fees need to maintain the status until 1 year.
·         Whereas the Stamp duty on MOA and AOA remains same.

Fees payable to Registrar for Company Registration

For OPC and small Companies
Authorised Capital
Fees
Additional Fees
Up to Rs. 10 Lakhs
-
-
More than Rs. 10 Lakhs up to Rs. 50 Lakhs
2,000
Rs.200 for the capital of Rs. 10,000 or part thereof

Other than OPC and small Companies
Authorised Capital
Fees
Additional Fees
Up to Rs. 10 Lakhs
-
-
More than Rs. 10 Lakhs up to Rs. 50 Lakhs
36,000
Up to 50 Lakhs:
Rs. 300 Capital of Rs. 10,000 or part thereof
Up to 1 Crore:
Rs. 100 for Capital of Rs. 10,000 or part thereof for capital exceeding 50 Lakhs
More than 1 Crore:
Rs. 75 for every Rs.10,000 or part thereof for capital exceeding Rs. 1 crore
The total amount of additional fees shall not exceed the amount of Rs. 2 Crore 50 Lakhs

Conclusion
The small step of the government of paying no fees for start-up will encourage the new entrepreneur to come forward with their ideas. The minimal charges to incorporate a Private Limited Company will increase the size of the market and generate new opportunities for more people.

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