Compliance burden, funding options and liability protection compared.

By Kanoons Editorial Team · 6 min read · Last verified 2026-07-26

A Private Limited Company suits businesses planning to raise equity funding, since investors and ESOP structures are built around share capital, but it comes with heavier annual compliance.

An LLP offers the same limited liability protection with a lighter compliance load and no mandatory audit below ₹40 lakh turnover, but cannot issue equity shares, which makes it a weaker fit for startups expecting to raise venture funding.