Comparison of Company and LLP

A comparative analysis between a company registered under the companies act 1956 and an LLP registered under LLP act 2008 has been made on different parameters to create the reader to know the fine differences between both the business structures:

Comparison of LLP and Company

Governing Law

Company: companies act 1956 and rules made thereunder

LLP: LLP act 2008 and rules made thereunder.

Company Registration

Company: Mandatory

LLP: Compulsory

DIN/DPIN:

Company: Each director is need to have a DIN before appointing a director

Each director is need to have a DIN before appointing a director

LLP : Each designated partner is need to have a DPIN ( it contains 226A, 226B, and 266E of the companies act 1956) before appointing as a designated partner.

DSC:

Company:  At least one director of the company should have a digital signature

LLP: At least one designated partner should have a digital signature

Minimum number of partners/members:

Company: Minimum 2 for private limited company and 7 for public limited company

LLP: Minimum 2 partners

Designated partners/ Managing partners/ Directors

Company: Appointment of Managing Director, Manager, Whole-time Director to be made in case of public companies having paid-up share capital of 5 crore or more.

LLP: No other obligatory need viz, appointment of Company Secretary, Whole-time Partner, Manager.

Maximum number of members

Company: In case of private limited company maximum 50 and no maximum numbers of members in public limited company.

LLP: No cap on the maximum number of partners.

Compulsory for a Designated Partner/ Director/ Member/ Managing partner to be a partner

 Company : Director need not to be a shareholder/member of the company

LLP : Designated partner has to be a partner of the company

Legal fee for the registration of company/LLP:

Company: Minimum typical legal fee for private limited company registration with a share capital of Rs.1,00,000 and approximately Rs.6000. The minimum typical fee for public limited company registration with a share capital of Rs.10,00,000 and an approximately of Rs.30,000.

LLP: Minimum suggestive legal fee for LLP registration is not exceeding of Rs.100000 and approximately Rs.1000. The fee for LLP registration is also not exceeding Rs.10,00,000 with an approximate amount of Rs.6000.

Name:

Company: Suffix “Limited” or “Private Limited” has to be added in the company name.

LLP: Suffix “LLP or Limited Liability Partnership” is to be added in the name.

Changes of the registered office within the same state

Company: A company can change its registered office from one place to another within a state only upon confirmation by the regional director.

LLP: LLP may change the registration office of their current location by observing the method put down in the LLP agreement and file the details to improve with the registrar in the specified form.

Authority to conduct business

Company: Individual member or nominee/non-executive director does not have authority in conduct of business of the company.

LLP: The LLP contract offers to the opposite; every partner may involvement in the LLP administration.

Drawings:

Company: Drawings are not permitted

LLP: Drawings are permitted as per the LLP agreement

Annual return

Company: Annual return is need to be registered with the ROC annually in the required look

LLP: Annual return is need to be registered with the ROC annually in the required structure

Transfer of shares/partnership rights in case of death

Company: Shares of every company (except private limited company). Because it is freely transferable

LLP: Rights/interest of partners in LLP are transferable as per the LLP conditions.

Taxation

Company: It is considered as a separate taxable entity under the Income Tax Act 1961

LLP: It is treated as a partnership firm under the Income Tax Act 1961

Preservation of books of account

Company: 8 years

LLP: 8 years

Formalities of incorporation:

PROCEDURES.

Company

Different documents / statements executed in specified formats pre-filled in e-forms (containing consent of directors) are need to be registered with the ROC with the company registration fees. The MoA and AoA are need to be registered as per the conditions of the companies act. It is specified in detail in Part II of the companies act.

LLP

Different documents/ statements performed in specified formats pre-filled in designated e-forms (containing consent of designated partners) are need to be registered with the ROC with the filing fees. The MOA of a company is asking the incorporation document, LLP agreement is to be registered. It is specified in chapter III of the LLP act 2008.

Different documents/ statements performed in specified formats pre-filled in designated e-forms (containing consent of designated partners) are need to be registered with the ROC with the filing fees. The MOA of a company is asking the incorporation document, LLP agreement is to be registered. It is specified in chapter III of the LLP act 2008.

We Solubilis in Bangalore helps to register your Limited Liability Partnership (LLP) registration within 10 days at an affordable cost.

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