Private limited company and llp
Posted: Mar 02, 2017
Limited liability Partnerships are growing in number since their introduction in 2008, because the LLP offers nearly all the benefits of a private limited company with none of the downside of a partnership firm. Both Private limited Company and LLP are similar with some differences in the documents and forms being filed for incorporation.
Private limited company
DSC- Obtaining Digital Signature Certificate for the proposed Directors
DIN - Obtaining Director Identification Number for the Proposed Directors
Obtaining name from Approval from MCA
Filing for Incorporation
Limited Liability Partnerships
DSC – Obtaining Digital Signature Certificate for the proposed Partners
DPIN – Obtaining Designated Partner identification Number for the proposed Partners.
Obtaining Name approval from MCA
Filing for incorporation
Both are registered with the Ministry of Corporate Affairs and are issued a certificate of incorporation. The processing time taking for incorporation average about 20 days. A private limited company costs at least Rs. 15,000 to start. But once this is done, you need to shell out at least Rs.15000 a year to comply with the MCA’s rules and regulations. An LLP is much cheaper. It costs just around Rs.11,000 to register and around Rs.4000 to comply with MCA regulations. Also the number of documents that have to be printed on Non Judicial Stamp Paper and Notarized is less for LLP than private limited company registration. In LLP if the annual turn over is less than 40 lakhs and the capital contribution is less than 25 lakhs then no need to be audited.
In LLP Partners hold ownership of the LLP and also hold powers to mange LLP. But the ownership of a private limited company is determined by its share holding and the shareholder do not directly participated in the management of the company, there is a clear distinction in a private limited company between the owners of share and the management.
The penalty for non –compliance o late filing of documents with MCA are higher for LLP and also 100 per day is levied when the non –compliance continues with no cap the liability. So LLP should be aware of the due dates and file the required documents with the registrar on time.
Private limited company offers its promoters a better image than that of LLP. LLPs are not as recognized in India as a private limited company, since it is a relatively new concept.
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