Even before to registering a business, an entrepreneur must realize the distinction between a partnership and a private limited company. It can be tricky enough to pick between LLP vs. Pvt. Ltd. as both have their very own merits and demerits. In this post, we will concentrate on the LLP industry and attempt to explain what an LLP is. Most people google the “variation between relationship and enterprise” in order to know the correct answer. So, let’s get started and read the post to the end. For good comprehension, don’t miss anything.
About Private Limited Company:Private limited corporation A private limited company is a charitable corporation of not fewer than 200 people and not more than 200 members whose liability is limited, whose shares are limited to its members and whose liability is not authorized to allow the people to subscribe to its shares or debentures.
Private limited company Features:
- An independent legal life.
- There need not be more than two directors and two members for a Private Limited company filings.
- The duties of its members are minimal.
- Allowable shares are not freely transferable between members.
- Enjoys existential consistency.
- The transfer of shares may be limited by the Articles of Incorporation, thus prohibiting any unwelcome individual from being a shareholder of the company.
About Limited Liability Partnership (LLP):
LLP Company is a modern corporate system that incorporates a partnership ‘s versatility with the benefits of a company’s limited liability at a low cost of compliance. In other words, it is an alternate solution corporate business vehicle that provides the advantages of a company’s limited liability, but did allow its members the flexibility to organise their internal operations, as in the case of a partner company, on the basic principle of a mutually agreed agreement.
LLP ‘s features:
- There is a distinct independent body in the LLP Company.
- It needs a minimum of two partners.
- No minimum capital contribution obligation.
- LLP’s and its partners’ shared rights and obligations shall be regulated by an LLP arrangement between the partners or between LLP and its partners.
- Provision for the conversion into LLPs of corporations/ private limited companies/ unlisted companies.