03 September 2013
We have just increased our ASC to 1 Cr.& accordingly paid Rs.20000/- towards stamping & 50500 towards ROC fees. Kindly guide where should i account for in books of accounts?
03 August 2025
When you increase your Authorised Share Capital (ASC) and pay fees such as ROC fees and stamp duty, here’s how you should account for it in your books:
📌 Nature of the Expense: The fees paid to ROC and for stamp duty for increasing ASC are not revenue expenses — they are capital in nature, because they relate to an increase in the capital structure of the company and provide long-term benefit.
✅ Correct Accounting Treatment: Particulars Amount (₹) Preliminary Expenses A/c Dr. 70,500 To Bank A/c 70,500 (Being ROC and stamp duty fees paid for increase in ASC)
🧾 Notes: "Preliminary Expenses" or "Miscellaneous Expenditure" is the account under which such costs are initially debited.
This is shown under “Other Non-Current Assets” in the Balance Sheet as per Schedule III (Companies Act, 2013).
You can amortize it over 5 years (as per prudent accounting practice) by writing off a portion to Profit & Loss A/c each year.
Optional (if you amortize over time): plaintext Copy Edit Profit & Loss A/c Dr. ₹14,100 To Preliminary Expenses A/c ₹14,100 (Being 1/5th of ROC and stamp duty amortized) 🚫 What Not to Do: Do not debit it to Share Capital or Reserves.
Do not treat it as a regular administrative expense (like ROC filing fees for annual forms).
If you’re preparing for audit or filing with ROC, make sure these are properly documented with supporting challans and Board resolutions.
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