Company law and LLP: answers to common questions
Forming a company or LLP, annual ROC filings, directors and meetings, changes in capital, closure, and partnership firms. Each answer gives the short answer first, then the detail and the legal basis.
Starting a company or LLP
How do I register a private limited company, a one person company or an LLP?
A private limited company needs at least two directors and two shareholders; a one person company needs one member and a nominee; an LLP needs two designated partners. A company is registered on the MCA portal through SPICe+, which also gives PAN, TAN, GSTIN if asked for, and EPFO and ESIC registration. An LLP is registered through RUN-LLP and FiLLiP, and its LLP agreement is filed within 30 days.
Read the full answer · Reviewed 8 November 2026
Should I form a private limited company or an LLP?
A private limited company suits a business that wants outside equity, ESOPs, or a structure investors and banks know well; it can pay tax at about 25% under the concessional regime, but profits are taxed again as dividends. An LLP has fewer compliance requirements, no tax on profits distributed to partners, and an audit only above ₹40 lakh turnover or ₹25 lakh contribution, but pays tax at 30% and suits closely held businesses.
Read the full answer · Reviewed 8 November 2026
Annual filings and ROC
What annual filings must a private company make with the Registrar of Companies?
Every company files its financial statements in AOC-4 within 30 days of the AGM, and its annual return in MGT-7 (or MGT-7A for small companies and OPCs) within 60 days. ADT-1 is filed within 15 days of appointing an auditor. Other common filings are DPT-3 by 30 June, MSME-1 every half-year if MSE dues are outstanding beyond 45 days, and DIR-3 KYC for directors, now once every three years.
Read the full answer · Reviewed 8 November 2026
What are the late fees for ROC filings, and how does a company clear a backlog?
AOC-4 and MGT-7 filed late carry an additional fee of ₹100 a day for each form, with no upper limit; other forms carry a multiple of the normal fee. Penalties under the Act are on top, and directors of a company that has not filed for three years are disqualified for five. To clear a backlog, file the oldest years first, hold the missed AGMs, and seek compounding or adjudication for the defaults. Watch for MCA amnesty schemes.
Read the full answer · Reviewed 8 November 2026
Does a small private company need a statutory audit?
Yes. Every company registered under the Companies Act must have its financial statements audited every year, whatever its size or turnover, even if it did no business. Small companies get relief in what the auditor reports on: CARO 2020 and the report on internal financial controls do not apply, and auditor rotation is not required. The first auditor is appointed by the board within 30 days of incorporation.
Read the full answer · Reviewed 8 November 2026
What is a small company under the Companies Act, and what relaxations does it get?
Since 1 December 2025, a small company is a private company with paid-up capital up to ₹10 crore and turnover up to ₹100 crore. Holding and subsidiary companies, Section 8 companies and companies under special Acts are excluded. Small companies need only two board meetings a year, file a shorter annual return, skip the cash flow statement and CARO, have no auditor rotation, and pay half the penalties.
Read the full answer · Reviewed 8 November 2026
Directors, meetings and changes
How many board meetings must a company hold, and when must the AGM be held?
A company holds its first board meeting within 30 days of incorporation and at least four a year after that, with no more than 120 days between two meetings. Small companies, OPCs, dormant companies and Section 8 companies need only one in each half of the calendar year, at least 90 days apart. The AGM is held within six months of the year end, usually by 30 September, and the first AGM within nine months of the first year end. OPCs do not hold AGMs.
Read the full answer · Reviewed 8 November 2026
How is a director appointed or removed, and what are DIN, director KYC and disqualification?
Every director needs a Director Identification Number (DIN). The board can appoint an additional director, who must be confirmed at the next AGM, and the company files DIR-12 within 30 days. Shareholders can remove a director by ordinary resolution after a special notice and a hearing. Since March 2026, director KYC is filed once every three years. A director of a company that has not filed returns for three years is disqualified for five.
Read the full answer · Reviewed 8 November 2026
Closing a company
How can a company be closed: by strike-off or by winding up?
A company that has not carried on business for two years, or never started within a year of incorporation, and has no liabilities, can apply to be struck off in STK-2 after a special resolution and filing its pending returns. A solvent company with assets or creditors to settle is closed by voluntary liquidation under the Insolvency and Bankruptcy Code, through an insolvency professional. Close GST, income tax and bank accounts before you apply.
Read the full answer · Reviewed 8 November 2026
LLP and partnership firms
What are LLP Form 8 and Form 11, and when are they due?
Form 11 is the LLP's annual return, giving its partners and their contributions; it is due by 30 May. Form 8 is the statement of account and solvency, with the financial position and income for the year; it is due by 30 October. Both are filed every year, even with no business. A late filing costs ₹100 a day for each form, with no upper limit, and the designated partners can be penalised.
Read the full answer · Reviewed 8 November 2026
When does an LLP need to get its accounts audited?
An LLP must get its accounts audited if its turnover exceeds ₹40 lakh, or its partners' contribution exceeds ₹25 lakh, in any financial year. Below these limits an audit is optional, but the designated partners must still certify the accounts in Form 8. A tax audit is separate: it applies when turnover exceeds ₹1 crore (₹10 crore with little cash), or under the presumptive scheme rules.
Read the full answer · Reviewed 8 November 2026
How is a partnership firm registered in Uttar Pradesh, and is registration compulsory?
Registration of a partnership firm is optional under the Indian Partnership Act, but an unregistered firm cannot sue a third party or its partners to enforce a contract. In Uttar Pradesh, firms are registered with the Registrar of Firms, Societies and Chits, through the state's online portal, with a stamped and notarised partnership deed, partners' identity and address proofs, and proof of the place of business. Income-tax law treats registered and unregistered firms alike.
Read the full answer · Reviewed 8 November 2026
How can a partnership firm be converted into an LLP or a company, and what is the tax effect?
A firm converts into an LLP by filing Form 17 with FiLLiP, where all partners become partners of the LLP and no one else joins. It can become a company by registration under Part I of Chapter XXI, or the business can be taken over by a new company. Conversion into a company is exempt from capital gains if all partners become shareholders in the same ratio, get only shares, and keep at least 50% for five years.
Read the full answer · Reviewed 8 November 2026