In Practice is a Saturday series where we share real stories, honest observations, and lessons from our work with businesses across India. No jargon, no textbook theory. Just what we've seen happen in practice.
A founder called us last week about incorporating a private limited company. We walked through the process, the documents, the timeline, the government fees, and our professional charges.
Then came the question we hear at least once a week:
"Why is there such a difference? I can get this done online for Rs 999."
Fair question. And we had a story for him.
The Rs 999 Incorporation That Cost Rs 40,000
A few months ago, a founder came to us. He'd already incorporated his private limited company through a discount registration portal, one of those platforms that advertise incorporation at rock-bottom prices.
The incorporation itself went fine. SPICe+ form filed, CIN received, PAN and TAN generated. So far, so good.
Then the real work began.
The founder needed to file his first annual returns, appoint an auditor, and get a few routine compliance matters sorted. Normal post-incorporation stuff. He reached out to the portal's support team.
No response for three days. Then a templated reply. Then silence again.
He tried calling. Got transferred twice, put on hold, then disconnected.
At this point, he wanted out. He decided to move his files to an independent professional who'd actually be reachable. Simple enough, right?
Not quite.
The Exit Trap
When he asked the portal to transfer his documents and records, they sent him a bill. Rs 10,000 to Rs 20,000. Just for releasing his own company's files.
He pushed back. They wouldn't budge.
It got worse. The portal had appointed a statutory auditor on behalf of the company, without properly consulting the founder about who the auditor would be or what the engagement terms looked like. When the founder tried to appoint a new auditor, the portal-appointed one refused to issue a No Objection Certificate.
For 15 days, this founder, who should've been focused on building his business, was stuck fighting with a support team to release documents that belonged to his own company.
The Provisional Financials Problem
Eventually, after escalating multiple times, the portal offered to hand over the financial statements. For another Rs 10,000.
The financials they delivered? Provisional. Bare-minimum. The company was new. No operating revenue, no significant transactions, nothing complex. But the statements were incomplete and poorly prepared. Not something you'd want to hand to a new auditor and say, "here, work with this."
By the time the founder reached us, we were racing against a compliance deadline. If we hadn't been able to appoint a new auditor in time, the company would've been in default under the Companies Act. Not because the founder did anything wrong, but because the portal had created a maze that took weeks to escape.
Why This Keeps Happening
This isn't a one-off horror story. We've heard versions of it from multiple founders. The pattern is consistent:
Low upfront cost → limited post-sale support → hidden charges for basic things → difficulty switching out.
Here's what most discount portals don't tell you upfront:
- Incorporation is the easy part. Filing a SPICe+ form is a process. What comes after (annual filings, auditor appointments, board resolutions, DIN KYC, GST returns) is where real professional judgment matters.
- You don't own the relationship. Your case gets assigned to whoever's available that day. There's no single person who knows your company, your history, or your situation.
- Exiting is expensive. Portals build lock-in through auditor appointments, document custody, and exit fees. Switching to an independent professional later often costs more than hiring one from the start.
- Compliance has deadlines. A missed ROC filing or a delayed auditor appointment doesn't just mean a penalty. It can mean a struck-off company or disqualified directors. When your "support team" takes 72 hours to respond to an email, deadlines don't wait.
What You're Actually Paying For
When you work with a practising professional, the fee isn't for filling a form. The form is the smallest part.
You're paying for someone who:
- Picks up the phone when you have a question at 8 PM about a notice you just received
- Knows your company's history without asking you to "raise a ticket"
- Tells you about a compliance deadline before it becomes a problem
- Handles your auditor appointment, your board resolutions, and your annual returns as one continuous relationship, not three separate "products" with three separate invoices
- Can be held professionally accountable under the Company Secretaries Act, 1980
That last point matters more than people realize. A practising Company Secretary is bound by professional ethics, regulated by ICSI, and personally liable for the work they sign. A portal is a technology platform. When things go wrong, there's no professional on the other end staking their career on your compliance.
Before You Hire Anyone: Ask These Five Questions
Whether you go with a portal, a CA, a CS, or anyone else, ask these before signing up:
- Who is my point of contact? Not a team. A person. What's their name and number?
- What happens after incorporation? Is ongoing compliance included, or will each filing be a separate charge?
- Who appoints the auditor? Do you get to choose, or does the platform assign one?
- What does it cost to leave? If you want to transfer your files to another professional next year, what's the process and price?
- What are you professionally liable for? If something goes wrong (a missed filing, an incorrect return), who bears the responsibility?
If the person on the other end can't answer these clearly, that tells you everything.
Already Stuck With a Portal? Here's What to Do.
If you're reading this and thinking "this sounds like my situation," don't panic. Here's the process to get out:
- Send a formal written request (email, not chat) asking for all your company documents: incorporation certificate, MOA, AOA, board resolutions, financial statements, auditor appointment letter, digital signature tokens.
- Set a deadline. Give them 7 working days. Be specific.
- If they demand charges, ask for a detailed invoice with itemized services. Many of the charges won't hold up if you push back with specifics.
- For the auditor NOC issue, write directly to the auditor (not the portal) requesting resignation or NOC. Under Section 139/140 of the Companies Act, 2013, the auditor's relationship is with the company, not the portal.
- Appoint your new auditor quickly. File ADT-1 within 15 days of appointment at the AGM. Missing this window creates a default.
- Engage a practising professional to review everything the portal handed over. Provisional financials, unsigned minutes, missing registers. Clean it all up before the next filing deadline.
It's fixable. But the longer you wait, the closer you get to defaults and penalties.
The Cheapest Option Isn't Always the Cheapest
The founder who came to us? He's been our client for over a year now. His compliance is current. His auditor is someone he chose. When he has a question, he sends a WhatsApp message and gets an answer, not a ticket number.
His total cost with the portal, including the incorporation, the exit fees, the provisional financials, and the weeks of lost time? Significantly more than what our fees would've been from day one.
The professional fee a practising professional charges isn't a markup. It's the cost of trust, availability, and accountability. You're not buying a registration. You're choosing who gets access to your business's most sensitive information. That decision deserves more weight than a Rs 999 discount.