Comparison Between Private Limited Companies and LLP
Below are the various points that show the difference between LLP & Private Limited Companies
| Sr. No. | Basis | Private Limited Company | LLP |
|---|---|---|---|
| 1 | Governing Law | Companies Act, 2013 | Limited liability Partnership Act, 2008 |
| 2 | Registration | Mandatory registered under MCA | Mandatory registered under MCA |
| 3 | Types | There are different types of Companies such as private limited company, public limited company, company limited by shares or guarantee. | There is only one type of LLP. |
| 4 | Liability | Limited | Limited |
| 5 | Statutory Audit | Mandatory | Depends on capital and Turnover |
| 6 | Dividend Distribution tax | Applicable | Not Applicable |
| 7 | Charter Document | Memorandum and Articles of Association is the charter of the company that defines its scope of operations. | LLP Agreement is a charter of the LLP which denotes its scope of operation and rights and duties of the partners vis-à-vis LLP. |
| 8 | Transfer/Inheritance of rights | Ownership is easily transferable | Regulations relating to transfer are governed by the LLP Agreement |
| 9 | Admission of Partner/member | A person can become member by buying shares of a company | A person can be admitted as partner as per the LLP Agreement |