{"id":14096,"date":"2018-09-03T11:04:56","date_gmt":"2018-09-03T11:04:56","guid":{"rendered":"https:\/\/www.legalraasta.com\/blog\/?p=14096"},"modified":"2026-04-07T17:17:30","modified_gmt":"2026-04-07T11:47:30","slug":"llp-better-private-limited-company","status":"publish","type":"post","link":"https:\/\/www.legalraasta.com\/blog\/llp-better-private-limited-company\/","title":{"rendered":"Why LLP is better than Private Limited Company"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.legalraasta.com\/blog\/llp-better-private-limited-company\/#LLP_vs_Private_Limited_CompanyPLC\" title=\"LLP vs Private Limited Company(PLC)\">LLP vs Private Limited Company(PLC)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.legalraasta.com\/blog\/llp-better-private-limited-company\/#Similarities_between_LLP_and_PLC\" title=\"Similarities between\u00a0 LLP and PLC\">Similarities between\u00a0 LLP and PLC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.legalraasta.com\/blog\/llp-better-private-limited-company\/#Registration_Procedures\" title=\"Registration Procedures\">Registration Procedures<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.legalraasta.com\/blog\/llp-better-private-limited-company\/#Why_LLP_is_better_than_Private_Limited_Company\" title=\"Why LLP is better than Private Limited Company\">Why LLP is better than Private Limited Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.legalraasta.com\/blog\/llp-better-private-limited-company\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"LLP_vs_Private_Limited_CompanyPLC\"><\/span><strong>LLP vs Private Limited Company(PLC)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\">Great! You have the perfect idea for a startup, you&#8217;re driven and have a team who backs you and are raring to go. But, wait! Have you thought about what type of company you will form? How many directors? What amount of capital you&#8217;re ready to dispose of? What direction will the company take? No? Well, with this article we hope to clear that up for you. We&#8217;re going to look at LLPs(Limited Liability Partnership) their merits and try to articulate the point that LLP is better than Private Limited Company.<\/p>\n<p style=\"text-align: justify;\">Before we paint PLCs in a bad picture and LLPs as the ultimate choice, there are many upsides to <a href=\"https:\/\/www.legalraasta.com\/private-limited-company-registration\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"color: #0000ff;\">Private Limited company incorporation<\/span> <\/a>as well as similarities between PLCs and LLPs. You can check out\u00a0<span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" href=\"https:\/\/www.legalraasta.com\/blog\/opt-private-limited-company-llp\/\" target=\"_blank\" rel=\"noopener noreferrer\">When to opt Private Limited Company over LLP<\/a>.<\/span> For a more detailed insight into when it could be wiser to go with PLCs.<\/p>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Similarities_between_LLP_and_PLC\"><\/span><strong>Similarities between\u00a0 LLP and PLC<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>LLPs and Private Limited Companies both require a minimum of 2 directors\/shareholders\/partners to start incorporation.<\/li>\n<li>Private Limited Companies as well as LLPs both have Limited Liability to personal assets. (Limited to a nominal value of shares of shareholders)<\/li>\n<li>LLPs and Private Limited Companies both are a body corporate and a legal entity separate from its partners and shareholders.<\/li>\n<\/ul>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Registration_Procedures\"><\/span><strong> Registration Procedures<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The procedures for <a href=\"https:\/\/www.legalraasta.com\/private-limited-company-registration\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"color: #0000ff;\">Private Limited Company Registration,<\/span><\/a> as well as <a href=\"https:\/\/www.legalraasta.com\/llp-registration\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"color: #0000ff;\">LLP registration<\/span><\/a>, are simplistic and very similar to each other.\u00a0We list down the basic steps in the incorporation of these companies.<\/p>\n<div class=\"table-1\">\n<table style=\"height: 202px;\" width=\"837\">\n<thead>\n<tr>\n<th align=\"left\">Private Limited Company<\/th>\n<th align=\"left\">Limited Liability Partnership LLP<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td align=\"left\">Obtain Digital Signature Certificate (DSC) for Proposed Directors<\/td>\n<td align=\"left\">Acquire Digital Signature Certificate (DSC) for Proposed Partners<\/td>\n<\/tr>\n<tr>\n<td align=\"left\">Acquire Director Identification Number (DIN) for Proposed Directors<\/td>\n<td align=\"left\">Obtain DIN or Designated Partner&#8217;s Identification Number(DPIN)<\/td>\n<\/tr>\n<tr>\n<td align=\"left\">Name Approval from Ministry of Corporate Affairs (MCA)<\/td>\n<td align=\"left\">Name Approval from MCA<\/td>\n<\/tr>\n<tr>\n<td align=\"left\">Filing for Incorporation<\/td>\n<td align=\"left\">Incorporation Filing<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>The Ministry of Corporate Affairs (MCA) is also taking steps to ensure faster processing of company incorporation procedure with <a href=\"https:\/\/www.legalraasta.com\/blog\/one-day-company-incorporation\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"color: #0000ff;\">One-Day Company incorporation with\u00a0<\/span><span style=\"color: #0000ff;\">SPICe.<\/span><\/a><\/p>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Why_LLP_is_better_than_Private_Limited_Company\"><\/span><strong>Why LLP is better than Private Limited Company<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\">It is easy to see that both Private Limited Companies as well as LLP Registration procedures are rather simplistic. Thus, it is not a question of ease of incorporation it comes down to deciding the path and future of the company. We have also seen that it could be beneficial to incorporate a private limited company sometimes. However, we provide you with a comprehensive argument for why LLPs should be preferred as compared to Private Limited Companies.<\/p>\n<ul>\n<li>LLPs combine the operational advantages of a Company as well as the flexibility of Partnership Firms.<\/li>\n<li>The fee for incorporation of an LLP firm is very nominal as compared to that for Private Limited Company.<\/li>\n<li>The compliance requirements for an LLP are significantly lower than those for a private limited company. The frequency of mandatory audits for an LLP are 0 if they haven&#8217;t crossed the 40 lakh turnover mark or 25 lakh revenue contribution mark.<\/li>\n<li>A private limited company has restricted ownership and can only extend the number of owners to a maximum of 200 shareholders. However, there is no such limit which applies to LLPs.<\/li>\n<li>The requirements for meetings are substantially higher for PLCs with the requirement of holding 4 board meetings and 1 Annual general meetings of the company.In an LLP, there is no compulsory requirement of holding meetings.<\/li>\n<li>The cost of incorporating and maintaining a PLC (Rs. 15000 Incorporation+ Rs.15000Compliances + Rs.15000 Audit) is 3 times higher than that of an LLP(Rs. 11,000 Incorporation + Rs.4,000 Compliances) . This makes LLP an economical choice.<\/li>\n<li>Adopting the PLC model could be economically hurtful to\u00a0 startup owners . Many a time, PLCs either are unable to pay or do not pay their compliances requirements in time , leading to fines of up to Rs. 1 lakh sometimes. However, with LLPs you can skip the hassle of fines altogether. The fees for compliances of LLP are very nominal and rarely lead up to a fine.<\/li>\n<\/ul>\n<h2 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p style=\"text-align: justify;\">Thus, there are many benefits of LLPs over PLCs. In light of all these benefits, it is a wise choice for early-phase startups to do LLP registration. While PLCs have their benefits, LLPs have been grossly underestimated to help shape a company&#8217;s foundation. LLPs have proven to be an absolute miracle for Brick and Mortar type businesses ever since the incorporation of LLPs in the LLP Act, 2008.<\/p>\n<p>At <a href=\"https:\/\/www.legalraasta.com\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"color: #0000ff;\">LegalRaasta<\/span><\/a>, we specialize in helping you incorporate a company whether it is <a href=\"https:\/\/www.legalraasta.com\/llp-registration\/\"><span style=\"color: #0000ff;\">LLP registration<\/span><\/a>\u00a0 or <a href=\"https:\/\/www.legalraasta.com\/private-limited-company-registration\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"color: #0000ff;\">Private Limited Company registration<\/span><\/a> along with<a href=\"https:\/\/www.legalraasta.com\/gst-registration\" target=\"_blank\" rel=\"noopener noreferrer\"> <span style=\"color: #0000ff;\">GST registration<\/span><\/a> and <a href=\"https:\/\/www.legalraasta.com\/income-tax-return\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"color: #0000ff;\">ITR filing<\/span><\/a>. With our daily updates on the <a href=\"https:\/\/www.legalraasta.com\/blog\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"color: #0000ff;\">blog<\/span><\/a>, we help you stay up to date with the latest law changes, compliance requirements, taxation among others such as food licenses. Talk to us about your requirements at <a href=\"tel:+918750048585\">+918750048585<\/a> \u00a0or send us an e-mail at <a href=\"mailto:contact@legalraasta.com\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"color: #0000ff;\">contact@legalraasta.com<\/span><\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>LLP vs Private Limited Company(PLC) Great! You have the perfect idea for a startup, you&#8217;re driven and have a team who backs you and are raring to go. But, wait! Have you thought about what type of company you will form? How many directors? What amount of capital you&#8217;re ready to dispose of? What direction will [&hellip;]<\/p>\n","protected":false},"author":15,"featured_media":14126,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[346],"tags":[351,350,354,355,352,45,353],"class_list":["post-14096","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-llp","tag-llp-registration","tag-llp-plc","tag-llpvs-plc","tag-llpvs-private-limited-company-limited-liability-partnership-vs-private-limited-company","tag-plc-registration","tag-private-limited-company","tag-private-limited-company-registration"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Why LLP is better than Private Limited Company | LegalRaasta<\/title>\n<meta name=\"description\" content=\"The challenge of what type of company to incorporate is an awkward one for startups. Here we try to articulate LLP is better than Private Limited Company.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalraasta.com\/blog\/llp-better-private-limited-company\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why LLP is better than Private Limited Company | LegalRaasta\" \/>\n<meta property=\"og:description\" content=\"The challenge of what type of company to incorporate is an awkward one for startups. 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