1. What is the minimum requirement for formation?

Minimum 2 Shareholder and 2 Directors (Directors and Shareholders can be the same person) are required to form a Private Company. Maximum number of members in a Private Company is restricted to 200. An LLP can be formed by 2 designated partners and there is no restriction for maximum number of Partners.

2. Is there any cost benefit of formation of LLP/Private Limited Company?

The cost of registering LLP is low as compared to cost of incorporating a private limited.

3. What are the charter documents of LLP and Company?

Memorandum and Article of Association are the charter of the company that defines its scope of operation. LLP Agreement is a charter of the LLP which denotes its scope of operation and rights and duties of the partners.

4. Is there any requirement of compulsory Audit?

All the companies, whether private or public, irrespective of their share capital, are required to get their accounts audited. But in case of LLP, there is no such mandatory requirement. A Limited Liability Partnership is required to get the audit done only if:- a. If the contributions of the LLP exceeds Rs. 25 Lakhs, or b. If the annual turnover of the LLP exceeds Rs. 40 Lakhs

5. Is it compulsorily to hold Board Meetings?

Yes, it is compulsorily for Private Limited Company to hold first Board Meeting within 30 days of its incorporation and minimum 4 Board meetings in a calendar year. Whereas, no compulsorily meeting of partners is required.

6. Is it compulsorily to hold Annual General Meeting (AGM)?

Yes, it is compulsorily for Private Limited Company to hold AGM within 6 months (9 months in case of first AGM) of closing of financial year. No annual general meeting is required for LLP.

7. What documents need to file annually with ROC?

A Private Company is required to file Balance sheet, profit and loss account, cash flow statement, Board Report, Auditor Report in e-form AOC-4 within 30 days of closing of financial year and Annual return in e-form MGT-7 within 60 days of closing of financial year with ROC. An LLP is required to file Statement of accounts and solvency in e-form – 8 with 6 month of closing of financial year and Annual Return in e-form – 11 within 60 days of closure of financial year.

8. Is there any requirement for keeping records?

Every private company is required to keep extensive records (books of accounts, minutes book, statutory registers) as compared to LLP, for LLP statutory records are basically limited to books of accounts. Others records keeping are governed by LLP agreement.