Categories: LLP Registration

Key difference between Private company & LLP

\

DIFFERENCE BETWEEN PRIVATE COMPANY AND LLP

  • Entrepreneur, Businessman, Investors have many choices in selecting the kind of business during which they need to take a position their hard money, like Private Company, Public Company, LLP, Partnership, etc.
  • If one needs to make a choice between Private Company and LLP, they get confused, although there’s a large difference in both.
  • As per Section 2(68), Private Company means a corporation having a minimum paid-up share capital as could also be prescribed, and which by its articles, —

·         restricts the correct to transfer its shares;

·         except within the case of 1 Person Company, limits the quantity of its members to 2 hundred.

  • Whereas, as per Section 1(n) of the LLP Act, 2008 liability Partnership means a partnership formed and registered under this act.

Basic Difference Between the Private Company and LLP : –

S. NO. BASIS PRIVATE COMPANY LIMITED LIABILITY PARTNERSHIP
1. REGULATORY AUTHORITY IT IS REGULATED UNDER THE COMPANIES ACT, 2013 IT IS REGULATED UNDER THE LIMITED LIABILITY PARTNERSHIP ACT, 2008
2. INCORPORATION PROCESS FORM SPICE + PART A AND B, FORM SPICE + MOA, FORM SPICE + AOA, AGILE PRO, FORM INC-9 ARE REQUIRED TO BE FILED FOR INCORPORATION OF PRIVATE COMP [ANY WHEREAS, FORM RUN-LLP, FORM FILLIP, FORM 3 ARE REQUIRED TO INCORPORATE LLP.
3. END NAME PRIVATE COMPANIES END THEIR NAME WITH “PRIVATE LIMITED.” LLP’S END THEIR NAMES WITH “LLP.”
4. NUMBER OF MEMBER MAXIMUM 200 MEMBERS CAN BE THERE IN A PRIVATE COMPANY THERE IS NO LIMIT ON A NUMBER OF MEMBERS.
5. MEETINGS THEY NEED TO HOLD AND CONDUCT PROPER BOARD MEETINGS AND GENERAL MEETINGS THERE IS NO SUCH REQUIREMENT TO HOLD A MINIMUM NUMBER OF MEETINGS.
6. AUDIT IT IS MANDATORY FOR PRIVATE COMPANIES. THE AUDIT IS MANDATORY IF THE CONTRIBUTION IS MORE THAN 25 LAKHS OR TURNOVER IS MORE THAN RS. 40 LAKHS
7. CONVERSION A PRIVATE COMPANY CAN BE CONVERTED INTO LLP BUT LLP CAN NOT BE CONVERTED INTO COMPANY
8. OWNERSHIP ALTHOUGH, MEMBERS ARE THE OWNER OF COMPANY DIRECTORS HOLD THE POSITION OF MANAGER FOR DAY-TO-DAY WORKING. NO SUCH CONFUSION BETWEEN MANAGEMENT AND OWNERSHIP, SINCE THE DESIGNATED PARTNERS WILL BE THE OWNER AS WELL AS MANAGERS OF THE LLP
9. TAX THE COMPANY IS REQUIRED TO PAY DIVIDEND DISTRIBUTION TAX WHEN IT DECLARES ITS DIVIDEND. ITR FILING IS REQUIRED TO BE PAID BY LLP. WHILE NO REQUIREMENT TO PAY DDT.

CONCLUSION

So, while concluding, we are able to say that LLP is more beneficial to entrepreneurs than company incorporation. Although LLP and personal Company appear to be the identical, there are some differences that make LLP an improved choice.

  • It goes without saying that LLP registration is an efficient mode of carrying business at the bottom risk. Besides, its name suggests, a limited liability partnership is that the most secure and cheapest business type.
  • A business aspirant should step into the competitive market of the company world through LLP. Thus, if you would like any assistance within the LLP registration procedure, contact RJA.

Also read :

Key Highlights of RACP Bill, 2020 and Companies (Amendment) Bill,2020

Summary of New MCA official updates under the Company Act 2013

Tags: LLP
Rajput Jain & Associates

Rajput Jain & Associates is a Chartered Accountants firm, with it's headquarter situated at New Delhi (the capital of India). The firm has been set up by a group of young, enthusiastic, highly skilled and motivated professionals who have taken experience from top consulting firms and are extensively experienced in their chosen fields has providing a wide array of Accounting, Auditing, Taxation, Assurance and Business advisory services to various clients and their stakeholders. Rajput jain & Associates, a professional firm, offers its clients a full range of services, To serve better and to bring bucket of services under one roof, the firm has merged with it various Chartered Accountancy firms pioneer in diversified fields. We have associates all over India in big cities. All our offices are well equipped with latest technological support with updated reference materials. We have a large team of professionals other than our Core Team members to meet the requirements of our prospective clients including the existing ones. However, considering our commitment towards high quality services to our clients, our team keeps on growing with more and more associates having strong professional background with good exposure in the related areas of responsibility.

Recent Posts

All about the Foreign Tax Credit in India: -Need to Know

What is a Foreign Tax Credit (FTC)? A Foreign Tax Credit (FTC) is a provision that allows residents to claim… Read More

3 days ago

Online Filing of Form 10F Without PAN for Non-Residents

How to Obtain a Tax Residency Certificate (TRC): A Tax Residency Certificate (TRC) is essential for determining treaty benefits under… Read More

3 days ago

Overview on IBBI 3rd Amendment Regulations

Important Amendment Regulations introduced to Corporate Insolvency Resolution Process The Insolvency and Bankruptcy Board of India (IBBI) has issued the… Read More

4 days ago

FAQs on ITR Filling Forms- Guide to select correct ITR

FAQs on ITR Filling Forms- Guide to select correct ITR Q.1 What does Form ITR-V and form ITR-Acknowledgement means? Form… Read More

1 week ago

Compliance Calendar under Companies Act & SEBI Act

Compliance Calendar under Companies Act and SEBI Act A compliance calendar helps companies track these and other regulatory requirements, ensuring… Read More

1 week ago

Easy Guidance on Meetings requirements as per Company Law

Easy Guidance on Meetings requirements as per Company Law Meetings under the Companies Act 2013 play a pivotal role in… Read More

1 week ago
Call Us Enquire Now