1. HOW MUCH MONEY DO I
NEED TO INVEST TO
START A PRIVATE
LIMITED COMPANY?

2.  Investment in a private limited company is
done through the equity shares in the
company.
 According to the definition provided in section
3 (1) subsection (iii) of the Companies Act,
1956, a private limited company is the one
which has a minimum paid capital of INR
1,00,000/-.

3.  The process of getting investment capital in
India is governed by the FDI, Foreign Direct
Investment Guidelines.
 It offers two methods – Investment through
Prior Approval and Investment under
Automatic Route.

4.  Investment through prior approval:
As the name suggests, a prior approval is
needed from the Government of India after
which the investment can be made in the
company.

5.  Investment under Automatic Route: no prior
approval of the company is needed. Once the
capital is remitted, the company has to carry
out the necessary document filling with the
RBI which are:
 Intimation of receipt of Share Capital (within 30
days)
 Legal Compliance Certificate from Company
Secretary
 Share valuation certificate from the Chartered
Accountant.

6.  The cost of formation of a private limited
company depends on the authorized capital of
the company.
 The breakup of the cost is as follows in the
table in the next slide:

7. BREAKUP OF THE COST:
ACTIVITY COST in INR
Taking Directors’ Identification 1500 (each director*2)
Number (DIN)
Taking digital signature of directors 5000 (each director*2)
Reservation of the name of the 1000
company
Filling fees of government for final 6200
documents
Other government expenses 3000
Total cost 23200