Structure
Private limited company or LLP? A plain-English comparison
Both give limited liability. They differ in funding, paperwork
and how ownership works.
5 min read
Choosing between a private limited company and a limited
liability partnership (LLP) is one of the first decisions a
founder makes. Both separate the business from its owners and
limit what you can lose to what you put in.
Where a private company fits
-
You plan to raise equity from angels or venture funds, who
are used to share structures
- You want to issue shares to employees later
-
You are comfortable with a regular compliance routine,
including a statutory audit
Where an LLP fits
-
Two or more professionals or partners who value flexibility
in how they share profit and decisions
-
You want lighter compliance and do not expect venture
funding
-
The business is service-led and will fund itself from
revenue
What to do next
Neither is better in every case. Tax treatment, future funding
and the people involved all matter. Try the structure finder
on our Tools page, then book an appointment to test the answer
against your plans.
Compliance
The annual compliance cycle of a private company
The meetings and filings that repeat every year, and what
happens when one is missed.
6 min read
A company has a rhythm of duties that repeat every financial
year. Knowing the sequence makes it easier to plan, and
cheaper than catching up later.
The usual sequence
-
Board meetings through the year, at least four, with no more
than 120 days between two meetings
-
The Annual General Meeting within six months of the year end
-
Financial statements filed in Form AOC-4 within 30 days of
the AGM
-
The annual return filed in Form MGT-7 within 60 days of the
AGM
-
Auditor appointment reported in Form ADT-1, and director KYC
kept current
Why dates matter
Late filings attract additional fees for every day of delay,
and repeated default can lead to penalties and, in serious
cases, disqualification of directors. Dates also change when
the government grants extensions, so always confirm the
current position.
Our compliance register on the Tools page lists the main items
for each type of entity. It is a starting point, not a
substitute for advice on your own company.
Governance
Why board minutes matter long after the meeting
Minutes are the company’s memory. Investors, auditors and
courts all ask to see them.
4 min read
Minutes are easy to treat as a formality. They are in fact the
formal record that a decision was taken, by the right people,
in the right way.
When they get tested
-
A bank asks for a certified copy of the resolution
authorising a loan
- An investor reviews records during due diligence
-
An auditor or regulator asks how a decision was approved
- A dispute arises between directors or shareholders
What good minutes do
They show who attended, what was discussed, what was decided
and who is responsible for the next step. They are written
clearly, signed on time and kept with the statutory registers.
If your records have gaps, it is better to fix them before
someone else finds them. A compliance health check is a good
place to start.
Startups
Before you raise funds: a founder’s paperwork checklist
Investors read the paperwork before they read the pitch deck.
Get it in order first.
5 min read
Funding conversations move faster when the company’s records
are clean. A tidy set of documents also signals that the
founders are careful.
What to have ready
-
Incorporation documents, the memorandum and articles of
association
-
An up-to-date register of members and a clear shareholding
table
-
A founders’ or shareholders’ agreement that covers roles,
vesting and exits
-
Board and shareholder minutes for every major decision
- Annual filings that are complete and on time
-
Any startup recognition, MSME or other registrations the
business holds
Common gaps
Shares issued without the right filings, founders’ equity
agreed verbally, and minutes written months later are the
issues we see most often. All of them are fixable, and easier
before a deal is on the table.
Insolvency
The Insolvency and Bankruptcy Code in plain English
A time-bound process for resolving unpaid debts, for companies
and for those they owe.
5 min read
The Insolvency and Bankruptcy Code, 2016 sets a time-bound
process for dealing with businesses that cannot pay their
debts. The aim is to rescue the business where it can be
rescued, and to close it in an orderly way where it cannot.
The basic outline
-
A creditor, or the company itself, can start the process
when a default has occurred
-
If the application is admitted, an insolvency professional
takes charge of running the company
-
Creditors vote on a resolution plan; if none is approved,
the company may go into liquidation
Why early advice helps
For a debtor, acting before pressure builds leaves more
options open. For a creditor, the right documents and a clear
record of default make a claim stronger. In both cases the
process has strict timelines, so delay costs.
This is a general overview. Insolvency matters are
fact-specific and need individual advice.
Closing a company
Closing a company properly: strike-off, winding up and revival
A company that simply stops trading is still a company, with
filings still due.
4 min read
Closing a business does not close the company. Until it is
formally struck off or wound up, annual filings and director
responsibilities continue, and penalties keep building.
The usual routes
-
Strike-off for a company that is no longer carrying
on business and has no pending liabilities, applied for with
the Registrar of Companies
-
Voluntary liquidation for a solvent company whose
owners decide to wind it up, under the Insolvency and
Bankruptcy Code
-
Liquidation after insolvency where the company cannot
pay its debts
Revival
In some cases a struck-off company can be restored through the
National Company Law Tribunal. It is far easier to close
properly the first time.
Which route fits depends on the company’s accounts,
liabilities and history. Book an appointment and we will map
it out.
Dhiraj Kumar & Co.Company Secretary