Mr. Tom had approached us with his proposal of registering his start-up as a private limited company. When our executives contacted him, he was quiet confused and inhibited. He shared his fears with us saying that he does not have Rs. 1 lakh with him at the moment. So, how will he deposit the same in the bank account of the company? Consequently, if he does not deposit the same, how will he start up his business?? Many of us, while reading this article will relate to Mr. Tom. A very common predicament with start-ups. Hence, we thought to explain as to “What should be the paid up capital for starting up a company?”   The minimum authorized capital required to start a private limited company.This especially represents the aggregate value of shares that can be issued by a company. The issued subscribed share capital should be within the limits of the authorised share capital.One can form a company today with Rs. 1 lakh in authorised as well as issued, subscribed share capital, with that entire amount allotted to shareholders. But such amount need not be invested in cash or by way of bank. As per the accounting rules and standards prevalent in India, at the end of every Financial Year, a company draws up its accounts. In the accounts, the authorized capital is depicted on the liability side of the balance sheet. This has to be counter balanced on the asset side by showing assets worth of Rs. 1,00,000. Now, the point is, assets can be in the form of computer, machinery, furniture, fixture or intellectual property (like Trademark, etc), cash or  bank. It is not at all necessary that you have to deposit Rs. 1,00,000 in bank or have it ready in cash.

Conclusion:

For starting up your business, you do not need Rs. 1,00,000 in your bank or in  cash. It is perfectly cool to start your business with the minimum amount that you are comfortable with. Start your own business, please visit: Company Registration   ____________________________________________________________