URGENT!! Do I need to apply ILR for my child?

[tulipz]

Hi all,
We (me, my husband and 5yr old) are on Tier1 visa since 2009. Current visa is valid until Apr 2015. We are applying for ILR on 16th June via PEO. I paid for all three of us while booking the appointment.

1. Do I need to apply for ILR for my 5yr old (born in India). Can I get our ILR done (parents) and then apply for her british passport directly?

2. If the answer to the above question is yes, how can I change the PEO appointment to one dependent rather than 2?

[Amber]

The child will require ILR for eventual registration as British.