Which is better partnership or Private Limited Company or LLP?
Which is better partnership or Private Limited Company or LLP?
LLP is a preferable form of organization as it provides benefits of both the private limited and partnership firm….Difference Between Private Limited Company & LLP – Analysis.
| BASIS | COMPANY | LLP |
|---|---|---|
| Members required | Minimum -2 Maximum-200 | Minimum -2 Maximum-no limit |
| Minimum capital required | No minimum share capital required. | No minimum share capital required. |
What is the difference between LLP and Private Limited Company?
In a LLP, the LLP Partners hold ownership of the LLP and also hold powers to manage the LLP. Therefore, a Partner in a LLP will be both a owner and a manager, whereas in a Private Limited Company, the shareholders (owners) do not necessarily have to have management powers.
What are advantages of limited liability partnership?
LLP is not liable to pay the tax on the income and share of its partner. Thus, no dividend distribution tax is payable as under section 40(b). Bonus, commission or remuneration, Interest to partners, any payment of salary, allowed as deduction.
What are the disadvantages of limited liability?
The following may be considered disadvantageous in some cases.
- Public disclosure is the main disadvantage of an LLP.
- Income is personal income and is taxed accordingly.
- Profit can not be retained in the same way as a company limited by shares.
- An LLP must have at least two members.
Is limited liability good or bad?
Limited liability is especially desirable when dealing in industries that can be subject to massive losses, such as insurance. A limited liability company (LLC) is a corporate structure in the United States whereby the owners are not personally liable for the company’s debts or liabilities.