LLP registration in Chennai, When starting a company one has to decide which business organization they want to incorporate and continue. Choosing a business organization is very important to shape the purpose of your business. Here, if one has to choose between private limit company registration and LLP one can see its advantages and differences so what is best for them.
Private limited companies are company where all the shares of the company are held privately. They can run their own business or hire a director to run the company on their behalf. This is a business entity kept private by some shareholders. It limits the owner’s liability to the extent of their shareholding and limits the number of shareholders only 50. It prohibits shareholders from trading shares in public.
LLP Registration in Chennai is a limited liability corporation. It is a unique form of Business Corporation where both collaborations and corporations exist. Here the organization is with a limited liability corporation. It is list under the LLP Act, 2008 and is with the Ministry of Corporate Affairs (MCA).
Contrast between LLP and private limited company:
There are a few similarities as well as a few variations between the two types of business administration; It is a private limited company and a limit liability partnership. Contrast between a private limited company and a limited liability partnership,
Separate the legal entity
They both have different legal entities, which means that a private limited company or LLP is treat as a separate person in the eyes of the law
Tax benefits (taxes)
Both types of business offer tax benefits. Tax benefits will be 30% of profits.
Limited liability
Liabilities of the members of the private limited company and in the event of an LLP incident, the liabilities of the partner will remain incomplete.
Registration process
Private Limited Registration and LLP Registration, Both types of business are require to register with the Ministry of Corporate Affairs.
| particular | Private limited company | LLP |
| law | Companies act 2013 | LLP act, 2008 |
| Minimum share capital | not required Minimum share capital not required | There is no need for minimum share capital |
| Director required minimum | 2 maximum -15 two designated partners maximum | Minimum 2, maximum – no limit |
| Members Required | 2 Maximum – 200 Minimum | 2 Maximum – No Limit |
| The board meeting | The board meeting is held within 120 days of the previous board meeting A minimum of 4 board meetings are to be held each year. | Not necessarily |
| Statutory audit | mandatory | Statutory is not compulsory unless the partner’s involvement exceeds 25 lakhs or the annual turnover exceeds 40 lakhs. |
| Liability | limited | limited |
| Annual filing | Annual declaration of financial records and annual revival with ROC. This is filed in MGT & Forum AOC in. | Annual financial records and annual income are entered in the ROC. This income is filed in LLP Form 8 and LLP Form 11. |
| Compliances | high | low |
| Transfer of shares | Shares It can be easily transferred. The article of the association can only prohibit it. | Can be changed by applying the contract before the notary declares |
| Foreign direct investment | Eligible for foreign direct investments by domestic and government route | subject to automated route |
Advantage of private limited company:
- The liability of shareholders is limit to the length of the shares they hold. The property is not take to pay the company’s arrears. Although there is an exception where fraud involving the company may occur, it will refute the owner’s liability protection.
- Trading in shares is prohibit; it benefits shareholders who do not want to sell shares to anyone outside the company. Therefore, the risk of adverse or friendly takeover is low.
- Private limited company has a permanent succession and an independent identity that is distinct from its owners or shareholders. This means that the company will still stand and exist, even if the term of the members expires or ceases to be a member. The change in shareholders will have no effect on the identity of the corporation. It will be the same with the same freedoms, defenses, land and properties. It will exist until the wound, according to the Companies Act 2013 [1].
- This is a separate legal entity. They have their own assets, and the liability is a legal entity that can sue or be sue or hold company property. It is capable of keeping in mind the funding and other features. He is a legal person under whose name the capital of the company is acquire and not of the shareholders.
Benefits of LLP registration
- LLP registration in Chennai can be form by any amount of capital. LLB does not require a minimum capital. This is set but not trouble without trouble on the owners.
- It requires a minimum of 2 partners and there is no limit on the maximum number of partners in an LLP.
- The cost of registering an LLP is lower than that of a company.
- All limited companies will have to have their accounts debit but there is no such requirement in case of LLP. However, it is necessary to audit when the contribution of LLP is more than Rs. 25 lakh or annual turnover of Rs. 40 lakhs.
- The LLP only has to file two i.e. annual returns and a statement of accounts and solvency.
- LLP is treat in the same way as partnership pay. The provision of dividend issue tax is not payable on LLP. Deduction is allow under section 40 (b) on any payment of interest, salary bonus commission or remuneration paid to the partners.