Partnerships are two different business structures that are governed by two different functions, namely the Companies Act 2013 and the Limited Liability Joint Act 2008. The two companies namely Pvt Ltd and Limited Liability Partnership offer many similar features required to run a small and large scale business, while in some respects there are many differences. In this article, we will discuss how to compare the LLP v / s private limited company of an entrepreneur starting a new business. Read more before going to llp company registration in india.
What is the meaning of Pvt Ltd and LLP?
- 1 What is the meaning of Pvt Ltd and LLP?
- 2 llp v / s Comparison between Private Limited Comapny
- 3 Similarities between Pvt. Ltd. and Limited Liability Partnership
- 4 Benefits of Pvt Ltd and Limited Liability Partnership
A private limited company is a company that is run privately for small businesses. The liability of the members of a private limited company is limited to the amount of shares they hold, respectively. Shares of a private limited company cannot be traded publicly.
Limited liability partnership is a business that requires a minimum of two members and no limit to the maximum number of members. The responsibility of LLP members is minimal.
llp v / s Comparison between Private Limited Comapny
LLP Versus Pvt Ltd Co., which is better? There are some similarities and some differences between the two types of business entities, namely the private limited company and the limited liability partnership. We will discuss both here for better understanding:
Similarities between Pvt. Ltd. and Limited Liability Partnership
- Separate law firm: Both have separate law firm. I.e. a private limited company or LLP is considered a different person in the view of the law.
- Advantages of Taxes (Taxation): Tax concessions are available for both types of business structures. The tax breaks will be 30% profit for LLP and 22% for Pvt.
- Limited Liability: In the case of a private limited company and LLP, the liabilities of the partners are minimal.
- Registration Process: Both Private Limited Registration and LLP Registration, both types of business must be registered with the Ministry of Corporate Affairs.
Benefits of Pvt Ltd and Limited Liability Partnership
Benefits of registering a business as an LLP
- An LLP is easier to start and manage and the process is less formal
- This is the lowest cost of registration compared to a company
- An LLP is like an institutional organization that exists in addition to a partner
- You can start an LLP with a minimum capital
Benefits of registering a business as a private limited company
- There is no minimum capital requirement in the company
- Members have limited responsibility
- It is a separate law firm
- This is a ‘person’ different from the members who compose
Private. Ltd. Co. and LLP have many similarities, but they are both different in their many characteristics and configurations. If you are an entrepreneur who needs external funding and aims for good returns, a private limited company is the right business structure for you.