Private Limited Vs Limited Laibility Company, Private Limited Company, Limited Liability Company, Ebizfiling

LLP Vs Pvt Ltd – A comparison between two important forms of organization in India

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 the comparison of Pvt Ltd. vs LLP from the viewpoint of an Entrepreneur starting a new business.


What is the meaning of Pvt Ltd and LLP?

A Private Limited Company is a company that is privately held for small businesses. The liability of the members of a Private Limited Company is limited to the number of shares respectively held by them. Shares of Private Limited Company cannot be publicly traded.


A Limited Liability Partnership means a business where a minimum of two members are required and there is no limit on the maximum number of members. The liability of the members of an LLP is limited.

Comparison between LLP vs Private Limited Company

LLP vs Pvt. Ltd. Co., which is better? There are a few similarities as well as a few differences between both types of business organizations i.e. the Private Limited Company and Limited Liability Partnership. Let us discuss both here for better understanding:

Similarities Between Pvt Ltd and Limited Liability Partnership

  • Separate legal entity: Both of them have separate legal entities. That means Private Limited Company or LLP is treated as a different individual in the eyes of law. 
  • Benefits on taxes (taxation): To both types of business structures tax benefits are given. The tax benefits would be 30% of the profits.
  • Limited Liability: In the case of Private Limited Company and LLP, the liabilities of the partners would be limited.
  • Registration Process: Pvt Ltd registration and LLP registration, Both types of businesses are required to be registered with the Ministry of Corporate Affairs.


Private Limited co. vs LLP Quick Comparison Table

Particulars Pvt Ltd Co.  Limited Liability Partnership.
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 15

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. 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
Transferability of shares Can be transferred easily. It can only be restricted by the Article of association.  Can be transferred by executing agreement before a notary public 
Foreign Direct Investment Eligible via automatic and government route Eligible via automatic route
Suitable to which type Businesses have turnover, entrepreneurs who need external funding. Startups, Businesses, trade, manufacturers, etc. 
Company Name Should end with Pvt. Ltd. Should end with LLP.
Fees and Cost of Incorporation Know the Fees and cost of incorporation of Pvt Ltd Co. here Know the Fees and cost of incorporation of an LLP. here
How to start/register? Check all the details here Check all the details here 


Advantages of Pvt Ltd and Limited Liability Partnership

The advantages of registering Business as an LLP

  • An LLP is easier to start and manage and the process has fewer formalities
  • It has a lesser cost of registration as compared to a Company
  • LLP is like a corporate body having its existence other than its partners
  • LLP can be started with any amount of minimum capital

The advantages of registering Business as a Private Limited Company

  • There is No Minimum Capital Requirement in the company
  • The members have Limited Liability
  • It is a Separate Legal entity
  • It is a different ‘person’ from the members who compose it


Suggested Read from Ebizfiling: Advantages of Private Limited Company


Pvt. Ltd. Co. and LLP have a lot of similarities yet they both are different in many of its characteristics and structures. If you are an entrepreneur who needs external funding and are aiming towards good turnover, a Private Limited Company is a perfect business structure for you.. While in case you are more than one person who wishes to start the business together with limited liability than Limited Liability Partnership is for you. 


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9 thoughts on “LLP Vs Private limited company – Comparison between two important forms of organisation in India

  1. Startup company best plane company registrationes LLP & PVT LTD & LIMITED , OPC

    Best company resistrationes best optional

  2. Hello, i have a query regarding conversion, if Pvt ltd has two shareholders who are companies, can they become partners in LLP after conversion.

    1. 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 /

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    Rajesh Moza

    16 Jul 2020

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    01 Jun 2018

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    01 Apr 2018

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