Difference between LLP & Pvt Ltd Company

Difference between LLP & Private Limited Company

When a person wants to start a business, it is commonly doubtful to choose the most suitable business form for new business entity. There are many business forms which an entrepreneur may choose, but the most commonly chosen business forms are private limited company and LLP. These are the common pillars for an entrepreneur to build his empire and most of the time, people are getting confused between LLP & Private Limited Company.


Major differences are as follow:

ParticularsPrivate Limited Company Limited Liability Partnership.
Law ApplicableCompanies Act 2013Limited Liability Partnership Act, 2008
Minimum share capital/ contributionNo requirement for minimum share capital. No requirement for minimum contribution
Members RequiredMinimum two
Maximum 200

Minimum two

Maximum no limit

Directors/ Designated Partners requiredMinimum two
Maximum 15

Two designated partners

Maximum not applicable

Board meeting Minimum 4 board meetings to be held each year with not more than gap between two meeting exceeds 120 days.Not necessary
Statutory AuditMandatoryNot compulsory unless partner’s contribution exceeds 25 lakhs or annual turnover exceeds 40 lakhs
Annual FilingAnnual statement of accounts & annual return with ROC. These are filed in form AOC 4 and MGT-7.Annual accounts and annual returns to be filed with ROC. These returns are filed in LLP form 8 and LLP form 11. 
ComplianceHighLow
LiabilityLimitedLimited
Transferability of sharesCan be transferred easily. It can only be restricted by the Article of association. Can be transferred by executing agreement before a notary public 
Foreign Direct InvestmentEligible via automatic and government routeEligible via automatic route
Suitable to which typeBusinesses have turnover, entrepreneurs who need external funding.Startups, Businesses, trade, manufacturers, etc. 
Company NameShould end with Pvt. Ltd.Should end with LLP.
Fees and Cost of IncorporationLittle bit higher than LLPCheap


Pvt. Ltd. Co. and LLP have a lot of similarities yet they both are different in many of its characteristics and structures. If you are an entrepreneur who needs external funding and are aiming towards good turnover, a Private Limited Company is a perfect business structure for you.. While in case you are more than one person who wishes to start the business together with limited liability, then Limited Liability Partnership is for you. 

    • Related Articles

    • What are the Requirements for registering an LLP?

      LLP Registration in India has become an alternative form of business that provides the advantages of a Company and the flexibility of a Partnership firm into a single organization. The Concept of LLP in India was introduced back in 2008 by the ...

    • Conversion of Private Limited Company to Public Limited Company

      Introduction The conversion of a private limited company to a public limited company is a significant step in the growth and development of a business. It allows the company to raise additional capital from the public by offering shares through a ...

    • Private Limited Company

      One of the most highly recommended methods for starting a business in India is to establish a private limited company, which provides its shareholders with limited liability while imposing certain ownership restrictions. When it is LLP, the partners ...

    • Private Limited Company Registration Documents

      Private Limited Company Registration Documents Following documents are required for private limited company registration in India: Passport size photos of all the directors PAN Card and Aadhaar Card of all the directors Identity proofs of all the ...

    • Benefits of Private Limited Company Registration

      Benefits of Private Limited Company Registration Private Limited Company Registration in India Comes with the following Benefits: Separate Legal Identity: Private Limited Company is an entirely separate legal entity. It has its own independent legal ...