Choosing the right business structure affects liability, compliance, taxation and fundraising. A private limited company and a limited liability partnership (LLP) are the two common choices for new ventures. This page explains how they differ and how registration works through the Ministry of Corporate Affairs (MCA). Junaid Khan & Co. assists entrepreneurs in Bhopal with both.
Private limited company or LLP?
| Point | Private Limited Company | LLP |
|---|---|---|
| Governing law | Companies Act, 2013 | LLP Act, 2008 |
| Minimum members | 2 shareholders, 2 directors (1 for an OPC) | 2 designated partners |
| Liability | Limited to shares | Limited to agreed contribution |
| Raising equity | Possible through shares; generally preferred by investors | Not by issuing shares |
| Annual compliance | Board meetings, AGM, audit, ROC filings | Form 8 and Form 11; audit above prescribed limits |
A One Person Company (OPC) is also available to a single founder, subject to conditions. The right structure depends on your plans for funding, the number of owners and the compliance you can manage.
Documents generally required
- PAN and Aadhaar of all directors or partners
- Address proof and photographs of directors or partners
- Proof of the registered office (utility bill) and NOC from the owner
- Digital Signature Certificates (DSC) for the proposed directors or partners
- Proposed names, plus the business objects and capital or contribution details
Company registration process (SPICe+)
- DSCs are obtained for the proposed directors.
- The name is reserved through SPICe+ Part A, or the name is applied for together with incorporation.
- SPICe+ Part B is filed with the MoA and AoA. DIN allotment, PAN, TAN, EPFO and ESIC registration, and the bank account opening request are integrated into this form, along with GSTIN where opted.
- After approval, the Registrar issues the Certificate of Incorporation with the CIN.
LLP registration process
- DSCs are obtained for the designated partners.
- The name is reserved through RUN-LLP, or included in the incorporation form.
- The FiLLiP form is filed for incorporation.
- The LLP agreement is filed in Form 3 within the prescribed time after incorporation.
After incorporation
Early compliance includes:
- opening the bank account
- the commencement of business declaration for companies
- appointing the first auditor
- maintaining statutory registers
- GST registration where required (see GST registration in Bhopal)
Startups may also apply for DPIIT recognition; see startup advisory and DPIIT. Ongoing books and audits are covered by our accounting and bookkeeping and audit and assurance services. Funding documentation is part of business advisory and funding support.
How we assist
We help you compare structures and prepare documents and forms, and we file with the MCA and follow up on any resubmissions. To discuss your plan, book an appointment.
FAQs
- Can I register a company with my home address as the registered office?
Yes, if proof of address and the owner’s NOC are provided. - Is a minimum capital required?
The Companies Act no longer prescribes a minimum paid-up capital for private companies. - Which is better for a startup seeking investment?
Investors generally prefer a private limited company because equity can be issued. The choice depends on your plans. - Can an LLP be converted into a company later?
Yes. Conversion is possible under the Companies Act, subject to the prescribed procedure. - Is Udyam registration available to companies and LLPs?
Yes. Eligible companies and LLPs can register on the Udyam portal; see Udyam registration.
