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.