Choosing the correct legal structure is among the most crucial decisions one makes when launching a new company. Private Limited Company and Limited Liability Partnership (LLP) are two of the most often used forms in India. Everyone has a unique set of guidelines and compliance criteria. Knowing these variances will enable us to choose the correct structure for our company and guarantee that we satisfy all legal requirements.

We will streamline the main compliance differences between private limited corporations and LLPs on this blog. When we prepare for LLP company registration or private limited company registration in India, we will be able to make wiser judgments.

Basic Structure and Governing Laws

We have to know the fundamental framework of any business before we start on compliance.

• Comprising the Companies Act 2013, a Private Limited Company is an independent legal entity apart from its owners. It calls for two directors at least and two stockholders.
• Conversely, an LLP combines aspects of a partnership and a firm and is governed by the Limited Liability Partnership Act of 2008. It calls for at least two specifically assigned partners.

These structural variances affect our handling of compliance, taxes, and filings for both kinds of corporate entities.

2. Annual Compliance Filings

LLPs and private limited corporations differ most in their annual compliance needs.

For Private Limited Companies

Each financial year, we must send in several returns and documentation, including:

• Form MGT-7: Annual Return; filed sixty days following the Annual General Meeting (AGM).Form AOC-4:
• Financial Statements: filed thirty days following the AGM.
• Income Tax Return (ITR-6): per the Income Tax Act, must be filed prior to the due date.
• AGM and Board Meetings: At least four board meetings annually are required.

For LLPs

The compliance is somewhat easier but still crucial.

• Form 11: Annual Return; should be submitted sixty days from the end of the financial year.
• Form 8: Statement of Account & Solvency To be turned in thirty days from six months following the close of the fiscal year.