The Companies Act, 2013 and The Limited Liability Partnership Act, 2008 have brought more business formation choices for entrepreneurs. Among these options Private Companies & Limited Liability Partnerships (LLP) are the most popular now.
Private Companies are becoming the go-to option for entrepreneurs seeking flexibility, funding and growth. But this choice comes attached with legal and compliance norms such as registration/incorporation rules, taxation, accounting and financing rules. These rules seem like a lot to negotiate for a startup.
Limited Liability Partnerships offers a distinct advantage for promoters because it delivers all the benefits of Private Company. Such as, operational flexibility and financial immunity to the promoters etc. Also, it provides tax benefits and an option to add an unlimited number of partners. The added benefit of an LLP is that it doesn’t hold you back with many compliance norms.
Before registering any business; firstly, entrepreneurs need to know the key factors that influence the legal form of a business which are:
Nature of business
Customers’ profiles (corporates, small businesses or individuals)
Expected Business Volume
Scalability of the business idea
Future Funding prospects
After a bit of thinking, you may feel that the below confusing aspects of business formation need to be clarified:
How to register your Startup?
Should you opt for LLP or Private Limited?
What legal documents do you need for the first step? And so on.
The above terms can get overwhelming for Startup owners, which is why we have brought together a comparison table which shows the pros and cons of a Private Limited and LLP. PRIVATE COMPANY VS LIMITED LIABILITY PARTNERSHIP
Company Registration in India, Bookkeeping and Accounting, ROC Filing, LLP Annual Filing, How to Register A Company in India, GST Registration , GST Return Filing , LLP Registration, LLP Closure, OPC Registration, Firm Registration, Payroll Companies in Bangalore, Incorporation of Company, Winding Up of A Company, Proprietorship Registration, Trademark Registration.
