This is a common suspicion that usually arises for business owners when they are ready to start a business. Here we have sorted out the major differences between Pvt. Ltd. and LLP.
We hope this blog helps you to choose the right entity.
The 9 Major Difference between Pvt Ltd and LLP
Governing Act
Members
- The Pvt. Ltd. company requires at least two (2) shareholders and the maximum limit is two hundred (200) shareholders.
- For LLP companies, the minimum shareholders limit is the same as Pvt. Ltd. company (2), and there isn’t any maximum shareholders limit. You can add as many shareholders as you want.
Directors
- Pvt. Ltd. directors where LLP there are called designated partners. For both companies, the minimum number of directors/designated partners are two (2). At the same time, the maximum number of directors for Pvt. Ltd. can be fifteen (15), and there isn’t any maximum limit for LLP designated partners.
Board Meeting
- The Pvt. Ltd. company must conduct four board of directors meetings in a financial year. For LLP, there isn’t any compulsion for board meetings.
Statutory Audit
- Pvt. Ltd. companies must submit the reports to the auditor every year.
- For LLP companies, they no need to submit such records until the turnover reaches 40 Lakhs.
Register Maintenance
- The Pvt. Ltd. companies should maintain loads of registers and records for ROC compliance.
- The LLP companies don’t need to maintain reports and documents.
Legal Compliance
- Pvt. Ltd. companies need to prepare lots of compliances after forming the company.
- LLP companies don’t need to keep such reports and documents as much as Pvt. Ltd.
Company Name
- The Pvt. Ltd. company needs to add a word that refers to their service, followed by the prefix. And the company name ends with Pvt. Ltd.
- For LLP, Everything is like Private Limited company, but the company name ends with LLP.
Registration Procedure
Like other procedures, the private limited registration and limited liability partnership registration procedures also differ from one another. We will see that in more detail in another post.
If you have any doubts other than this, Get advice from a business lawyer for all your IPR related concerns.
