Question
I am starting a small business and cannot decide between registering a Pvt Ltd company or an LLP.
Answer
A private limited company offers easier equity fundraising and stronger credibility but has heavier compliance, while an LLP has lower cost and lighter compliance but limited ability to raise equity. A Pvt Ltd needs a statutory audit every year regardless of size and must file AOC-4, MGT-7 and hold meetings. An LLP files only Form 8 and Form 11 annually, with audit mandatory only if turnover exceeds Rs 40 lakh or contribution exceeds Rs 25 lakh. Both give limited liability. Choose Pvt Ltd to raise investor capital or issue ESOPs; choose LLP for a lean, partner-run business.
This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.