At the time of setting up of business, you can either form a private limited company (PLC) or a limited liability partnership (LLP), depending on the type of business you are working in. When you’re starting a new business, there are many factors you need to take into consideration. There are several similarities between a Private Limited Company and LLP, but there are also some differences as well. we’ll explore the different aspects of a Private Limited. versus an LLP from the viewpoint of an entrepreneur.

The concept of Private Limited Companies is older than LLPs, so it is familiar to people in India in many areas of the world. That’s why there are more established processes for companies while the concept of LLPs is still new in India and evolving, it will eventually have its own long list of rules and regulations.

Benefits of LLPs

There are many benefits of registering as an LLP. An LLP is easier and more quickly registered than a Company, and the process has fewer formalities. With an LLP, there’s least amount of minimum capital to register. Unlike Private Limited, an LLP can be run with any minimum amount of money. If you do not want to invest much money in the start-up of a business and prefer to have fewer formal requirements all at once, then it is better to register as an LLP. An LLP is a quicker, easier way to set up your business. To register as an LLP all you have to have been a name and minimum capital of Rs. 1.

Benefits of Private Limited Company

The private limited company provides a set of benefits, including limited liability and availability as a legal entity. With a Private Limited Company, the founders’ liability is limited. There is very minimal amount needed (Rs. 100,000) to start a business as a Private Limited Company. If you register your business as a private limited company, it is a separate legal entity from the people who make up its membership.

Private Limited Company and Limited Liability Partnership are similar in some ways, but different in others. If you need external funding, Private Limited Company is a good option for your business. And if it’s just you and one or more people who wish to start a business together with limited liability, then Limited Liability Partnership is the best choice.