- Meeting expenses of promoter.
- Preliminary consultation charges on formation of company.
- Actual Govt. fee and stamp duty paid in the course of incorporation of legal entity.
- Secretarial cost incurred for dealing with Registrar of Companies (ROC).
- Expenses to open new facility or business (pre opening cost).
- Training expenses incurred prior to incorporation of company.
- Expenses incurred towards human resources prior to incorporation.
- Expenses incurred towards any pre incorporation agreement.
- Project report and feasibility study related expenses etc.
Companies Act Treatment
- To records the preliminary expense incurred prior to incorporation of the legal entity following entry should be passed on the first day of the incorporation : Debit the preliminary expenses A/c and Credit the Profit & Loss A/c for the amount determined as preliminary expenses.
- As stated above the preliminary expenses can be written off in five years, to record that following entry should be passed : Debit the Preliminary expenses written off the credit the preliminary expenses A/c with the amount which is equal to 1/5th of the total preliminary expense booked as per point no 1.
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