India offers various business structures for entrepreneurs to establish their businesses. Deciding for the right business structure becomes important for entrepreneurs. It affects how the business runs, handles risks, raises money, and builds trust. For the same purpose, this article differentiates elaborately to help you choose between an LLP and a Pvt Ltd Company.
What is an LLP(Limited Liability Partnership)?
An LLP (Limited Liability Partnership) is a business where partners share profits but are not personally responsible for company debts. It offers flexibility like a partnership and legal protection like a company.
Benefits of an LLP
An LLP serves the following benefits:
Easy to start and manage with fewer formalities.
Lower registration cost than a company.
Exists separately from its partners.
Continues even if a partner dies.
Can start with minimal capital.
Partners have limited liability.
Company Registration for an LLP
Follow these simple steps to register for an LLP:
Get DSC: For online document signing.
Apply for DIN: Unique ID for partners.
Reserve Name: Submit the LLP-RUN form.
File FiLLiP: For incorporation approval.
Get Certificate: Proof of registration.
File LLP Agreement: Defines partner roles.
Apply for PAN & TAN: For taxation.
Register for GST: If turnover exceeds the limit.
Open Bank Account: Using LLP documents.
What is a Pvt Ltd Company?
A Pvt. Ltd. Company is a privately owned business with limited liability. It has shareholders, a legal identity, and must follow company laws. It can’t publicly trade shares like a public company.
Benefits of a Pvt Ltd Company
The Pvt Ltd Company comprises the below-mentioned advantages:
No minimum capital is needed to start.
Owners have limited liability.
Company is a separate legal entity.
It continues even if owners change.
Easy to raise funds.
Company Registration for a Pvt Ltd Company
These easy steps can help you to register your Pvt Ltd Company without any issue:
LLP and Pvt Ltd companies have different benefits to serve. LLPs offer flexibility and fewer compliances, while Pvt Ltd companies provide better funding options and authority. Choosing the right structure depends on business goals and plans. Entrepreneurs are liable to decide based on their needs and growth vision.
LLP is better for small businesses needing flexibility and low compliance. Pvt Ltd is better for startups needing investment and growth. Choose based on business goals, funding needs, and compliance ease.
2. Can LLP be converted to PVT Ltd?
Yes, an LLP can be converted to a Pvt Ltd company as per MCA rules.
3. Who owns an LLP and a private limited company?
LLP is owned by partners, while a Pvt Ltd company is owned by shareholders.
4. What is the minimum turnover for a Pvt Ltd company and an LLP?
There is no minimum turnover requirement for either.
5. How long does it take to register an LLP vs. Pvt Ltd?
LLP takes about 10-15 days, while a Pvt Ltd company takes 7-10 days.
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6 thoughts on “LLP Vs Private limited company – Comparison between two important forms of organisation in India”
An individual or a corporate body may become a partner in an LLP. The LLP must have at least two Designated Partners. At least one of the Designated Partners must be an Indian citizen. A LLP’s body corporate partner may appoint an individual as a Designated Partner. For any further assistance get in touch with Ebizfiling at +919643203209 / info@ebizfiling.com
For starting a new a company or applying to become a Director of a company, to procure Digital signature/Trademark & other IPRs etc Ebizfiling India Pvt Ltd is there to do all these jobs through single window service. Ebizfiling is a complete online service platform and people working here are young professionals. They have been very honest with me, whatever they promised initially, they did it. I feel rates quoted by this company were lowest in comparison to others and they cleared all my doubts, wherever needed.
Amit Tripathi
01 Jun 2018
Easy and Fast Thanks for the Help, Very Nice Services will contact for other services too.
Hemanshu Mahajan
01 Apr 2018
I registered my LLP company, from eBizfilling. Great team and very competitive pricing. Will definitely use their services again.Thanks for work well done.
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Excellent post. How difficult is it to transfer from LLC to LLP. What are the tax implications of each mode.
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Hello, i have a query regarding conversion, if Pvt ltd has two shareholders who are companies, can they become partners in LLP after conversion.
Hello Heena Talesara,
Thank you for your Inquiry!
An individual or a corporate body may become a partner in an LLP. The LLP must have at least two Designated Partners. At least one of the Designated Partners must be an Indian citizen. A LLP’s body corporate partner may appoint an individual as a Designated Partner. For any further assistance get in touch with Ebizfiling at +919643203209 / info@ebizfiling.com