Which is better LLP or Pvt Ltd Co?


pvt & LTD

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.




Applicable Law

Limited Liability Partnership Act,2008

The Companies Act, 2013


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.


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


External Funding

Very difficult to raise external funding

Easy external funding through different modes like giving shareholding to others


Conclusively, we can say that

LLP is suitable for those who are looking for following points

Private Limited is suitable for those who are looking for following points

  • Less Capital
  • No external Funding
  • Less Registration Cost
  • Less statutory and legal compliances


  • High Turnover
  • Easy External Funding and arrangement of funds
  • High Recognition – as Private limited the most  trusted business structure
  • To get ESOP option


Click Here to read more on LLP Registration Process in India

Click Here to read more on  Private Limited Company Registration

In case of any further query contact your Trustworthy Advisors Manthan Experts at +91-9643-969-969.

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Knowledge Source:

Conversion of LLP into Private Limited Company

LLP Registration Process in India

Procedure For Incorporation Of Private Limited Company Using SPICe+

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