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There has always been an uncertainty among budding entrepreneurs when it comes to establishing business in a Limited Liability Partnership (LLP) or Private Limited Company. The two are mostly similar in their setup yet there are a few differences in the registration process. This article is exclusively elevated to exploring those differences and helps you choose what is best for you. 

What you should know about Private Limited Company?

  • A Private Limited Company runs small business with minimum two members and maximum 200 members.

  • Their liabilities are restricted to the amount of shares which cannot be traded publicly. 

  • Sharing Ownership and transferring the same are flexible here. 

  • Since this set up has shareholders as members, the management power is not owned by anyone. 

  • It is an individual, legal entity that runs under companies Act 2013.

  • It requires a minimum of two and a maximum of fifteen directors. 

  • Board meetings and statutory audits are mandatory every year.

  • It is appropriate for establishments that produce a turnover, Business men who seek external funding.

  • It is the most reliable business structure. 

How does LLP work?

  • The members in LLP can vary from two to unlimited. 

  • As the name suggests, their liability is limited.

  • Their shares can be transferred after executing an agreement from notary public.

  • Every Partner / Member in an LLP is both the owner and the manager.

  • It is also an individual, legal entity that is under Limited Liability Partnership Act 2008.

  • There are only two designated partners required to proceed with an LLP.

  • Board meetings and Statutory Audits are not necessary as long as the Partner’s Contribution and annual turnover do not exceed 25 lakhs and 40 lakhs, respectively.  

  • It is appropriate for business start ups, trade and manufacture.

  • It is the most flexible structure. 

Registration Process in Comparison:

Private Limited Company

Limited Liability Partnership

  • A Checklist is to be filled.

  • The checklist is sent for receiving Digital Signature followed by the approval of the company name SPICE.

  • MOA and AOA are drafted. 

  • MCA approval takes around 4 – 5 days and issues Incorporation Certificate with CIN.

  • PAN & TAN are allotted with the Incorporation Certificate, later bank account will be opened. 

  • Various registers are expected to be maintained. 

  • A Checklist is to be filled.

  • The checklist is sent to obtain Digital Signature after which an application is sent for LLP name registration through RUN.

  • The FILLIP form is prepared to apply for DIN.

  • MCA approval takes around 6 – 7 days & issues LLP agreement. 

  • PAN & TAN are need to be apply manually, and bank account will be open.

  • No registers are to be maintained.


In a Nutshell:

Having known the similarities and differences between LLP Company Registration and Private Limited Company Registration, it is advisable to take a wise choice that pertains to your company model. Anytime, LLP is easier and flexible with cheaper government costs whereas Private Limited Company is the most reliable. The registration tenure is solely dependant on government approval and prompt submission of documents. So it is a necessity to choose a unique name. Got more queries contact our staff in assistance to ensure clarity.   

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