What are Preliminary Expenses?

By meenakshi|Updated : August 26th, 2022

Preliminary expenses are expenses incurred by the promoters of a company while incorporating the company before the initial stage and commencement. A section of such expense is debited to the profit and loss account every year and is considered an asset and includes registration fees, logo and designing costs, legal or professional fees, stamp duty, printing, etc.

Examples of Preliminary expenses

Preliminary expenses are the types of expenses or charges before the company is started, and because of it these expenses are also known as the associated costs. A few examples of the preliminary expenses are- 

  • Legal amount paid prior to the incorporation of the company. 
  • The expenses that are responsible for a feasibility study or marketing survey. 
  • The cost related to marketing like Logo design and branding. 
  • Charges paid for consulting and professional services during incorporation.

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FAQs on Preliminary expenses

  • Preliminary expenses are the charges that are charged before the initiation of the company, i.e. , it includes money that is paid before operating a company like legal fees or branding and marketing costs

  • The Preliminary expenses are considered as assets by the company and includes the following- legal or professional fees, registration fees, logo and designing costs, printing, stamp duty, etc.

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