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Great! You have the perfect idea for a startup, you’re driven and have a team who backs you and are raring to go. But, wait! Have you thought about what type of company you will form? How many directors? What amount of capital you’re ready to dispose of? What direction will the company take? No? Well, with this article we hope to clear that up for you. We’re going to look at LLPs(Limited Liability Partnership) their merits and try to articulate the point that LLP is better than Private Limited Company.
Before we paint PLCs in a bad picture and LLPs as the ultimate choice, there are many upsides to Private Limited company incorporation as well as similarities between PLCs and LLPs. You can check out When to opt Private Limited Company over LLP. For a more detailed insight into when it could be wiser to go with PLCs.
The procedures for Private Limited Company Registration, as well as LLP registration, are simplistic and very similar to each other. We list down the basic steps in the incorporation of these companies.
Private Limited Company | Limited Liability Partnership LLP |
---|---|
Obtain Digital Signature Certificate (DSC) for Proposed Directors | Acquire Digital Signature Certificate (DSC) for Proposed Partners |
Acquire Director Identification Number (DIN) for Proposed Directors | Obtain DIN or Designated Partner’s Identification Number(DPIN) |
Name Approval from Ministry of Corporate Affairs (MCA) | Name Approval from MCA |
Filing for Incorporation | Incorporation Filing |
The Ministry of Corporate Affairs (MCA) is also taking steps to ensure faster processing of company incorporation procedure with One-Day Company incorporation with SPICe.
It is easy to see that both Private Limited Companies as well as LLP Registration procedures are rather simplistic. Thus, it is not a question of ease of incorporation it comes down to deciding the path and future of the company. We have also seen that it could be beneficial to incorporate a private limited company sometimes. However, we provide you with a comprehensive argument for why LLPs should be preferred as compared to Private Limited Companies.
Thus, there are many benefits of LLPs over PLCs. In light of all these benefits, it is a wise choice for early-phase startups to do LLP registration. While PLCs have their benefits, LLPs have been grossly underestimated to help shape a company’s foundation. LLPs have proven to be an absolute miracle for Brick and Mortar type businesses ever since the incorporation of LLPs in the LLP Act, 2008.
At LegalRaasta, we specialize in helping you incorporate a company whether it is LLP registration or Private Limited Company registration along with GST registration and ITR filing. With our daily updates on the blog, we help you stay up to date with the latest law changes, compliance requirements, taxation among others such as food licenses. Talk to us about your requirements at +91-8750008585 or send us an e-mail at contact@legalraasta.com.