decide between

LLP over Pvt Ltd. company

By CA Manisha Fatarpekar

why to start, explained in just

5 practical tips

Tip One:

LLPs typically have a simpler, faster, less costly and more streamlined registration process compared to Private Limited Companies.

The registration process for an LLP involves fewer legal formalities and requirements, making it relatively easier and quicker to set up.

Tip TWO:

LLPs generally have a less burdensome compliance framework compared to Private Limited Companies, which can be advantageous for businesses, particularly those with limited resources or smaller teams.

Tip Three:

Private Limited Companies are subject to mandatory audit requirements, regardless of their turnover or size. LLPs, on the other hand, are exempt from mandatory audits unless their annual turnover exceeds a specified threshold limit.

Tip four:

In a LLP, the partners have direct ownership and control over the business.  In a Pvt Ltd Company, Shareholders own the company, and a board of directors is responsible for managing the business

Tip five:

LLPs typically have a less complex dissolution procedure compared to Private Limited Companies. Also, closing a LLP is easier and quicker compared to a Private Ltd Company.

bonus tip

You are in an industry that prefers LLPs over an industry that requires a Pvt Ltd company.