Roc fees for authorised capital

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Querist : Anonymous

Querist : Anonymous (Querist)

21 October 2012 we have established a pvt. ltd. company in march 2012. after that in august we have increased authorised capital in the month of August 2012 therefore that fees we have paid on increasing authorised capital can be considered as preliminary expenses or not.

If not then please tell me how it will be treating in accounts.

Thanking you

Ajay Mishra

Ajay Mishra (Expert)
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22 October 2012 Hi

No, it is not a part of preliminary expenses, because it is not related with work associated with registration of company. So, I think, it is not associated with incorporation of the company and it will not be a part of preliminary expenses.

Querist : Anonymous

Querist : Anonymous (Querist)

22 October 2012 how i show in respected accounting period.

please tell me accounting entry.

Thanking you

Ajay Mishra

Ajay Mishra (Expert)
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22 October 2012
Please check what is your first accounting period fixed by company.

Querist : Anonymous

Querist : Anonymous (Querist)

22 October 2012 my accounting period is 2011-12.

Ajay Mishra

Ajay Mishra (Expert)
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22 October 2012 Hi

No, please check again what is the accounting period.

Querist : Anonymous

Querist : Anonymous (Querist)

22 October 2012 our first accounting period is 01/04/2011 to 31/03/2012

please tell me it's urgent

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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22 July 2025 Regarding the ROC fees paid for increasing authorized capital after incorporation, here’s how it should be treated:

1. Is ROC Fees on Increase of Authorized Capital Preliminary Expense?
No, it is not a preliminary expense.
Preliminary expenses relate to expenses incurred for setting up the company before it starts business (like incorporation fees, legal fees for formation, etc.).
Increase of authorized capital happens post-incorporation and is a separate event.

2. Accounting Treatment
The ROC fees paid for increase in authorized capital should be treated as an expense related to the capital restructuring or as a capital reserve adjustment cost.

Usually, it is debited to the "Securities Premium Account" or directly written off to Profit & Loss account (depending on company policy and applicable accounting standards).

3. Suggested Accounting Entry
Option 1: Write off as an Expense (P&L Account):

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Dr. ROC Fees (Expense) XXX
Cr. Bank/Cash XXX
Option 2: Adjust Against Securities Premium Account:

If the company raised fresh capital along with the increase in authorized capital, and premium is received:

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Dr. Securities Premium Account XXX
Cr. Bank/Cash XXX
And separately record the ROC fees expense in P&L.

4. Treatment in Financial Statements
The ROC fees paid are part of administrative expenses or capital-related expenses and will reduce profit in the respective financial year (your accounting period 01/04/2011 to 31/03/2012).

Since the increase in authorized capital happened in August 2012 (which falls in the next financial year 2012-13), the ROC fees should be accounted in the financial year in which the increase and payment occurred (i.e., 2012-13).

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