Which is better LLP or Pvt Ltd Co?

LLP and Private Limited Company are two popular forms of Business registrations in India. Both of these business structures are very similar in nature and simultaneously they both are substantially different from each other.

Let’s compare both of the Business forms to understand which business form is suitable for whom.

BASIS	LLP	PRIVATE LIMITED COMPANY
Applicable Law	Limited Liability Partnership Act,2008	The Companies Act, 2013
Membership	Minimum – 2 Maximum – No Limit is prescribed	Minimum – 2 Maximum – 200
No. of Directors/Designated Partners	Minimum Designated Partners – 2 Maximum Designated Partners – No Limit is prescribed	Minimum Directors – 2 Maximum Directors – 15
Minimum Paid-up Share Capital	Not Applicable	No Minimum Requirement is prescribed
Minimum Authorized Share Capital	Not Applicable	Rs. 1Lakh
Separate ownership & Management	In LLP, owners and managers both are the same persons that are partners.	In Pvt. Ltd., shareholders hold the ownership while Directors of the company hold the power of management.
Recognition	Less popularity and recognition	More popularity and recognition
Board Meetings	Not Applicable	Minimum 4 Board Meetings during a Financial Year
Obligation of Statutory audit	Not mandatory unless total capital exceeds Rs.25 Lac or total turnover exceeds Rs.40 lac	Always Mandatory
Statutory Compliances	Comparatively low	Comparatively high
Transferability of Shares	Not allowed. Partners can transfer their share by executing contract	Allowed
External Funding	Very difficult to raise external funding	Easy external funding through different modes like giving shareholding to others