Limited Liability Partnership (LLP) Vs Private Limited Company
Private Limited Company and Limited Liability Partnership are two different business structures governed by two different acts namely Companies Act 2013 and Limited Liability Partnership Act 2008 respectively. Both entities i.e. Pvt Ltd and Limited Liability Partnership offer many similar features required to run a small to large sized business, while there are many differences also in some aspects. In this article we will discuss comparison Pvt Ltd. vs LLP from the viewpoint of an Entrepreneur starting a new business.
Similarities Between Private Limited and Limited Liability Partnership
- Separate legal entity: Both of them have separate legal entity. That means Private Limited Company or LLP is treated as a different individual in the eyes of law.
- Benefits on taxes (taxation): To the both types of business structures tax benefits are given. The tax benefits would be 30% from the profits.
- Limited Liability: In case of Private Limited Company and LLP, the liabilities of the partners would be limited.
- Registration Process: Private Limited Company registration and LLP registration, Both the types of businesses are required to be registered with the Ministry of Corporate Affairs.
Private Limited Company vs LLP Quick Comparison Table
Particulars |
Private Limited Company |
Limited Liability Partnership (LLP) |
Law Applicable |
Companies Act 2013 Limited |
Liability Partnership Act, 2008 |
Minimum share capital |
No requirement for minimum share capital. |
No requirement for minimum share capital |
Members Required
|
Minimum two Maximum 200 |
Minimum two Maximum no limit |
Directors required |
Minimum two Maximum 200 |
Two designated partners Maximum not applicable |
Board meeting |
Within 120 days of the previous board meeting. Minimum 4 board meetings to be held each year. |
Not necessary |
Statutory Audit |
Mandatory |
Not compulsory unless partner’s contribution exceeds 25 lakhs or annual turnover exceeds 40 lakhs |
Annual Filing |
Annual statement of accounts & annual return with ROC. These are filed in form AOC 4 and MGT 7. Check more details here |
Annual accounts and Annual returns to be filed with RoC.. These returns are filed in LLP form 8 and LLP form 11. Check more details. Here |
Compliance |
High |
Low |
Liability |
Limited |
Limited |
Foreign Direct Investment
|
Eligible via automatic and government route |
Eligible via automatic route
|
Suitable to which type
|
Businesses having turnover, entrepreneurs who need external funding |
Startups , Business, trade, manufacturers etc |
Company Name
|
Should end with Private Limited |
Should end with LLP. |
How to start / register? |
|
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