Complete comparison on compliance, taxation, funding, and costs. Make an informed decision for FY 2025-26.
Ideal for startups and businesses planning to raise investment from VCs, angels, or go public.
Perfect for professionals and small businesses prioritizing low compliance and flexibility.
| Parameter | Private Limited | LLP |
|---|---|---|
| Incorporation | Companies Act, 2013 | Requires 2 directors, 2 shareholders (min) | LLP Act, 2008 | Requires 2 partners (min) Winner |
| Liability | Limited liability for shareholders | Limited liability for partners |
| Compliance | High - Annual filings, board meetings, AGM, ROC returns | Low - Minimal compliance requirements Winner |
| Taxation | 25% (turnover < ₹400 Cr) | 30% (turnover > ₹400 Cr) + Dividend Tax | Partners taxed as per income slab | No dividend tax Winner |
| Fundraising | Can raise equity funding from VCs, angels, PEs Winner | Cannot raise equity funding (only loans) |
| Audit | Mandatory annual audit by CA | Audit required only if turnover > ₹40 lakh or contribution > ₹25 lakh Winner |
| Foreign Investment | FDI allowed in most sectors Winner | FDI restricted - only in specific sectors |
| Conversion | Can convert to LLP or Public Limited | Can convert to Private Limited |
| Cost | ₹10,000 - ₹15,000 (registration) + ₹20,000-30,000/year (compliance) | ₹8,000 - ₹12,000 (registration) + ₹5,000-10,000/year (compliance) Winner |
| Management | Directors + Shareholders (complex structure) | All partners can manage (flexible) Winner |
| Ownership Transfer | Easy - shares can be transferred Winner | Requires partner consent |
| Goodwill | Higher credibility with investors and banks Winner | Lower credibility compared to Pvt Ltd |
Our business consultants will help you choose the perfect structure based on your specific needs
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