Private limited or LLP for a two-founder SaaS startup that plans to raise an angel round next year?

Investors subscribe to equity or compulsorily convertible preference shares, want an ESOP pool, and rely on the Companies Act framework for board rights and share classes. An LLP cannot issue shares or ESOPs, so you would convert before the round, and conversion means a fresh incorporation, transfer of contracts and IP, and a few weeks of lost momentum exactly when you want speed.

The LLP's genuine advantages are a lower compliance load (no audit until turnover crosses ₹40 lakh or contribution ₹25 lakh) and simpler profit withdrawal. Those matter for a services business that will stay founder-owned; they rarely outweigh investor-readiness for a venture-track product.

Two tax points in favour of the company: the angel tax under section 56(2)(viib) was abolished from FY 2024-25, so premium on your shares is no longer taxed as income, and a DPIIT-recognised startup incorporated before 1 April 2030 can apply for the section 80-IAC holiday (100% deduction for any three of its first ten years, turnover up to ₹100 crore).