Company vs. LLP Registration and Closure Process in India: A Complete Guide from compliance calendar LLP

Starting a business in India is exciting, but choosing the right business structure is crucial. Two of the most popular options are Private Limited Company (Pvt Ltd) and Limited Liability Partnership (LLP). While both offer limited liability and are recognized legal entities, they differ in structure, compliance, and registration requirements.

Also, just as there is a legal process to register a business, there’s a proper way to close it when it’s no longer active.

In this article, we’ll walk you through:

The registration process for Company and LLP

The closure process for both entities

Relevant sections and provisions

Frequently Asked Questions (FAQs) to help clarify your doubts

Part 1: Company Registration in India

A Private Limited Company is governed by the Companies Act, 2013 and regulated by the Ministry of Corporate Affairs (MCA). It is ideal for startups and businesses that plan to raise funds or scale in the future.

- Legal Provision

Section 3 & Section 7 of Companies Act, 2013: Deal with incorporation and legal requirements.

SPICe+ (INC-32): A simplified integrated form used for company registration.

- Steps for Company Registration

Get Digital Signature Certificate (DSC)

Directors and shareholders need a DSC to sign the application.

Apply for DIN (Director Identification Number)

A DIN is mandatory for anyone becoming a director.

Reserve Company Name using SPICe+ Part A

Choose a unique name that complies with Rule 8 of Companies (Incorporation) Rules, 2014.

Draft MOA & AOA

These documents define the company’s constitution and rules.

Fill SPICe+ Part B and Submit

This includes company registration, PAN, TAN, GST, EPFO, and more.

Get Certificate of Incorporation (COI)

Once approved, the company receives its COI, along with PAN and TAN.

Part 2: LLP Registration in India

An LLP (Limited Liability Partnership) is governed by the LLP Act, 2008. It is a hybrid structure combining the flexibility of a partnership and the limited liability of a company.

- Legal Provision

Section 11 of LLP Act, 2008: Defines the incorporation process.

Rule 11 of LLP Rules, 2009: Describes the procedure for LLP registration using Form FiLLiP.

- Steps for LLP Registration

Obtain DSC for Partners Required to digitally sign registration documents.

Apply for Name Reservation through RUN-LLP Check for name availability and apply via the Reserve Unique Name (RUN) portal.

File Form FiLLiP

This is the main form used to incorporate an LLP.

Draft and File LLP Agreement (Form 3)

Must be filed within 30 days of incorporation.

Obtain LLP Incorporation Certificate

Issued by the Registrar upon successful verification.

Closure of a Company in India

If a company is no longer operational or never started its business, it can apply for strike off.

- Legal Provision

Section 248 of Companies Act, 2013: Governs the process of voluntary removal of a company from the ROC register.

Form STK-2: Used for strike-off application.

- Closure Steps

Hold Board and Shareholder Meeting Pass a resolution to close the company.

Clear Liabilities Settle all pending dues and loans.

File Pending Returns Ensure all ROC filings are complete.

Prepare Documents Include affidavit, indemnity bond, and statement of accounts certified by CA.

File STK-2 with MCA Pay ₹10,000 as government fees.

Get Final Approval Once verified, ROC publishes the notice in the Official Gazette.

Closure of LLP in India

If your LLP has stopped business or has never commenced operations, it can apply for strike off using Form 24.

- Legal Provision

Rule 37 of LLP Rules, 2009: Allows LLP to apply for striking off if it has been non-operational for at least 1 year.

Form 24: Filed with ROC for closure.

- Closure Steps

Cease Commercial Activity LLP must not be operational during the last year.

Close Bank Accounts Obtain a bank closure letter.

Prepare Affidavits & Declaration All designated partners must affirm that there are no liabilities.

File Pending Forms (Form 8 & 11) Ensure financial and annual returns are up to date.

Get Statement of Accounts Certified by CA Should show NIL assets and liabilities.

File Form 24 Submit all documents to the ROC for closure.

Frequently Asked Questions (FAQs)

- What is the cost of registering a company or LLP?

For a company with minimal capital, it can range from ₹7,000 to ₹15,000.

For an LLP, it typically costs ₹5,000 to ₹10,000, depending on professional fees.

- How long does it take to register a company or LLP in India?

Usually 7–10 working days, provided all documents are in order.

- Is GST registration mandatory after incorporation?

Not always. It's mandatory only if your turnover crosses the threshold (₹20/40 lakh) or if you're involved in interstate trade or e-commerce.

- Can I close my company or LLP on my own?

While you can file on your own, it is advisable to consult a professional (CS, CA, or lawyer) to ensure accuracy, especially for company closure procedure involving affidavits and CA certifications.

- Is it compulsory to file an LLP Agreement?

Yes, it must be filed within 30 days of incorporation using Form 3. Failure can lead to penalties.

- What happens if I don’t close an inactive company or LLP?

You may face:

Penalties for non-compliance

Director disqualification (for companies)

Late filing fees and legal consequences

Conclusion

Whether you’re choosing between a Company or LLP, both are excellent business structures depending on your goals. A Private Limited Company suits businesses that plan to scale or seek funding, while an LLP works best for professional partnerships and small businesses seeking operational flexibility.

Just as it’s important to incorporate your entity correctly, closing it legally is equally important to avoid penalties, maintain compliance, and ensure peace of mind.