Comparison between LLP and Private Limited

PRIVATE LIMITED COMPANY VS LLP

1.INCORPORATION

THE INCORPORATION PROCESS OF BOTH PRIVATE LIMITED COMPANY AND LLP IS SIMILAR IN MANY WAYS WITH FEW DIFFERENCE IN DOCUMENTATION PROCESS. BOTH FORMS REQUIRE DSC (DIGITAL SIGNATURE CERTIFICATE) OF ALL DIRECTORS/DESIGNATED PARTNERS. OBTAIN NAME APPROVAL FROM MCA EITHER BY FILING RUN OR DIRECTLY THROUGH INCORPORATION PROCESS. PRIVATE LIMITED COMPANY REQUIRE TO ISSUE MEMORANDUM AND ARTICLE OF ASSOCIATION OF COMPANY WHICH. IN LLP, LLP AGREEMENT REQUIRE TO FILE WITH ROC AFTER INCORPORATION.

2. COSTING

PRIVATE LIMITED REGISTRATION COST IS HIGHER THAN LLP REGISTRATION. PRIVATE LIMITED REGISTRATION COST STARTING WITH 10000/- BUT LLP REGISTRATION COST IS MUCH ECONOMICAL. LLP REGISTRATION COST IS RS. 6000-7000 (APPROX).

3.FLEXIBILITY

IMPORTANT DIFFERENCE BETWEEN IN PRIVATE LIMITED COMPANY AND LLP IS FORMER IS MORE FLEXIBLE DUE EASY transferability OF SHARE AND OWNERSHIP IN COMPARISION TO LATER.

4. OWNERSHIP

IN PRIVATE LIMITED COMPANY OWNERSHIP IS DIFFERENT FROM MANAGEMENT, AS SHAREHOLDER DO NOT PARTICIPATE IN THE MANAGEMENT OF BUSINESS BUT IN LLP LLP PARTNERS HOLDS THE BOTH OWNERSHIP AND MANAGEMENT.

5 COMPLIANCE

IN COMPLIANCE LLP ENJOY THE BIG ADVANTAGE AS THEY DO NOT NEED TO MANAGE AUDITED BOOKS OF ACCOUNTS IF THE REVENUE IS LESS THAN 40 LAKHS OR CAPITAL CONTRIBUTION IS LESS THAN 25 LAKHS. INSTEAD PRIVATE LIMITED COMPANY REQUIRE TO AUDIT ACCOUNTS ANNUALLY

6. CLOSURE

CLOSURE OF PRIVATE LIMITED COMPANY IS TECHNICALLY VERY DIFFICULT AND TIME-CONSUMING IN COMPARISON TO LLP.

DIR 3 KYC COMPLIANCE

KYC OF ALL DIRECTORS OF ALL COMPANIES, WHO HAS BEEN ALLOTTED DIN ON OR BEFORE 31ST MARCH, 2018 IS MANDATORY

Ministry of Corporate Affairs would be conducting KYC of all Directors of all companies annually through a new eform viz. DIR-3 KYC to updating its registry. It would become mandatory for every director who has been allotted DIN on or before March 31, 2018 and whose ‘DIN’ is in ‘approved’ status, to file form DIR-3 KYC on or before August 31, 2018. The DIN eKYC form must be filed using the Directors own DSC (Digital Signature) and should be certified by a practising Professional like Chartered Accountant, Company Secretary or Cost Accountant. While filing the form, the Unique Personal Mobile Number and Personal Email ID would have to be mandatorily indicated and would be duly verified by One Time Password (OTP).

DISQUALIFIED DIRECTORS

Even the Directors who have been disqualified by the MCA for not filing Annual Returns of the company for last 3 years are also required to file DIN eKYC to update their email and phone number on MCA record. Failure to file DIR-3 eKYC form by disqualified Directors will also lead to additional penalty.

DOCUMENT REQUIRED

For filing OF DIR 3 KYC compliance following documents are required 1. PAN of Directors 2. Proof of permanent address (Latest Bank Statement/ Latest Mobile or Electricity Bill) 3. Copy of Aadhaar Card (Mandatory for Indian Director) 4. Copy of passport if they have the same 5. Mobile No (will need OTP for Verification) 6. Email (will need OTP for Verification) 7. Digital Signature of Director

DUE DATE

Due Date of Filing DIR-2 eKYC is 31st August 2018. The MCA system will automatically deactivate those DINs for which the form is not filed on or before the due date. If a DIN is deactivated for non-filing of DIN eKYC form, then filing of DIR-3 KYC in respect of such deactivated DINs would be allowed upon payment of a specified fee Of Rs 5000./

MCA certificate is sufficient proof of PAN/TAN

The government on Saturday said the Certificate of Incorporation (COI) issued by the Ministry of Corporate Affairs (MCA) is adequate proof of Permanent Account Number (PAN) or Tax Deduction and Collection Account Number (TAN) for a company. “Finance Act, 2018, amended section 139A of the Income-tax Act, 1961, and removed the requirement of issuing PAN in the form of a laminated card,” an official statement said, adding, “hence, it is clarified that PAN and TAN mentioned in the COI issue .(Source: ET)

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Company Registration & GST Registration

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