Difference between LLP and Pvt Ltd company in India

Today we look at complex legal and compliance issue in a simple to do way this series is brought to you by in turn-on your partner and provider offend-to-end business services hello and welcome to Iligan whiteboard Fridays where we look at various compliance and tax related issues in a user friendly fashion today we will discuss our verycore of this a lot of people have been approaching asking what to do a private limited or an LLP registration in India so let’s see what are the various advantages and disadvantages of both so limited liability nature of the business so this is available both of private Olympic and LLP so that’s nota problem so in case of I doing business if something goes wrong then you can always you can always your personal assets should be protected so in both of this LLP registration does not have a fundamental concept of having a shares kind of things so things like he shops differential voting rights or a preferential or a different classes of shares these are not possible in the lately and it’s only possible in private campaign kind of thing it is a much better scalability private limited company india so as you grow as the business grows you can actually convert it to public which is like we cannot be converted into a public so you may have to start afresh also for big business private rented as a good structure of an indiscreet that it does save orders very discreet terms defined responsibilities and statements so that has to govern the company overall so that’s the way of scalability helps is much better in private limited as compared to an LLP getting this capital investors preferably invest only in private limited and they don’t go fora little bit from some of the reasons being they don’t have great exit options differential voting rights different classes of shares and stuff that’s why are youth risk capital into LLP becomes very challenging the prime value Private Limited has much better branding as some type to an LP because a lot of large enterprise customers do business only with the private content although that’s not a government rule which prevents it it’s more of an internal policy but public at large no much better about private limited not about LLP because everything is a new thing and it is more associated as of now also in going forward also it would mostly be associated with smaller forms of doing business or assemblies and all would be pushy using LLP’s whereas big businesses have private in pavement stuff so the brand value is much better in private limited you can rage an array or you can have an array partners foreign direct investments can be taken in both but private limited scores much better because it is possible to have complete set of foreigners or an average to be apart of private limited whereas in Lata least one person has to be in India to form an idol p so going public as I’ve already said it is not possible in everything and LLP has a good one day of pass through taxation so in private limited when you distribute your profits asdivcomidend then you have to pay you something called dividend distribution tax whereas in reality push tax profits then we distributed to partners as tax-free so that’s a place where every is force much better than private rented but again given the kind of flexibility and scalability needs of business this may not come in very handy and private limited company may still be a much better at preferred choice some of the other points which is like more from the practical sense like Olympia is more restricted for more suitable for smaller businesses so occur into a pilot spacer if you are doing a very local set of business then it could be a good ideate have amp or if you are not trying to raise any money the employees also because ugly don’t know much about LLP becomes little challenging to attract great talents imp also it cannot share wealth with employees and stuff so these are few points where LLP is score slope but overall again we recommend to discuss with an expert and see what best suits you and then take a call with a private limpid or that will bring which one Togo for these are the major factors that you should keep in mind and I guess this points on answers to this point should help you decide which would be a good charge to go ahead let sit on either hand white good Friday.

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