Act Comparison
Private Limited Company vs LLP
A Private Limited Company is governed by the Companies Act, 2013 and must be audited every year. An LLP is governed by the LLP Act, 2008 and needs an audit only above ₹40 lakh turnover or ₹25 lakh contribution. The deciding factor is usually funding: a Private Limited Company can take foreign investment freely, while an LLP needs FEMA approval.
| Aspect | Private Limited Company | LLP |
|---|---|---|
| Governing Law | Companies Act, 2013 | LLP Act, 2008 |
| Ownership | Shareholders + Directors | Partners (Designated Partners) |
| Minimum Members | 2 Directors, 2 Shareholders | 2 Designated Partners |
| Limited Liability | Yes | Yes |
| Audit Mandatory | Yes — always | Only if turnover > ₹40L or contribution > ₹25L |
| Annual ROC Filings | Form AOC-4 + MGT-7 | Form 8 + Form 11 |
| Compliance Burden | Higher | Lower |
| Foreign Investment | Allowed | Restricted (FEMA approval needed) |
| Suitable For | Startups seeking funding, scalable businesses | Professional services, small businesses |