In today’s Article we will point major differences between a Private Limited Company And Limited Liability Partnership, That will enable you to differentiate properly between these two terms.
LLP-Limited Liability Partnership Vs Private Limited Company
Whenever you start a business, It is always primary step to determine which type of business entity you will choose to start and operate. In India, you have the option to start your business as a Sole proprietorship, Pvt ltd Company LLP Registration , Partnership, joint Hindu family, One Person Company and public company etc.
To enjoy benefits and manage your business better and efficient you need to make a sound decision regarding choice of business entities.
Today In this article I will tell you about private limited company and LLP(Limited Liability Partnership), I will outline its meaning and differences.
So let’s begin first with Private limited company.
Private limited company
Private Limited Company is a Business entity that has a separate identity from its owner or members.A company being a separate legal person is unaffected by the death or other departure of any member and continues to be in existence irrespective of the changes in ownership.Ownership of a business can be easily transferred to a company by transferring shares. The signing, filing and transfer of share transfer form and share certificates are sufficient to transfer ownership of a company. In a private limited company, the consent of other shareholders may be required to effect share transfers.Private Limited Companies can raise equity funds in India. Companies can also issue equity shares, preference shares, debentures and accept deposits with RBI permission.Private Limited Company is an artificial person, can acquire, own, enjoy and alienate, property in its name.A Private limited company has a minimum of two members and a maximum of fifty members.The process for registration of a company is governed by the Ministry of Corporate Affairs, Companies Act, 2013 and the Companies Incorporation Rules, 2014.
Limited Liability Partnership
Limited Liability Partnership (LLP) was introduced in India by way of the Limited Liability Partnership Act, 2008. An LLP is a legal entity and a juristic person established under the Act. Therefore, an LLP has the wide legal capacity and can own property and also incur debts. An LLP is an independent legal person, is unconcerned by the death or other departure of any Partner. Hence, LLP sustains to be in existence irrespective of the changes in ownership.The ownership of LLP can be easily transferred to another person by inducting them as a Partner of the LLP. No Partner can make any claim upon the property of the LLP.Minimum 2 Partners are required to start LLP and there is no limit on maximum partners.
Difference between LLP-Limited Liability Partnership and Private Limited Company
- In case of a private limited company, the maximum number of members are 200 whereas In case of LLP there is no limit of a maximum number of members which are required to form a business entity.
- In case of private limited company audit is required but in case of LLP audit is only required when the turnover exceeds Rs 40 lakh.
- In case of Private Limited company Annual Accounts and Annual Return to be filed with ROC and In case of LLP Annual statement of accounts and solvency under LLP Annual Compliance & Annual Return has to be filed with ROC
- In case of LLP, The registration cost is much less than the Private limited company.
- In case of a private limited company, the liability is Limited to the extent of unpaid capital whereas In case of LLP the Liability is Limited to the extent of the contribution to the LLP.
- In case of Private Limited Company, Dissolution is Very procedural. Voluntary or by Order of National Company Law Tribunal and in case of LLP Dissolution is Less procedural compared to the company or by Order of National Company Law Tribunal.
Further Help required Anywhere In India.
By reading this article You must have made your decision about which business entity to choose. And now if you wish to Start a private limited Company or an LLP In India Then you can always take help of our experts, They will provide more information and will help you in starting and Registering a Private Limited company or LLP In India. So please visit our website MYONLINECA today! To get best solutions anywhere In India.