Private Limited Company can be established when 2 or more people form an association to generate profits through their business operations. These companies do not have the right to transfer their shares publically.
It is a separate legal entity which is run by the Board of Directors and is registered under the Companies Act, 2013. All the decisions related to a private limited company is discussed in the Annual General Meeting.
This form of business includes the benefits of a company and a partnership firm. It can continue its existence even if there are any changes in the partners of the company.
The liability of its partners is limited to the amount agreed up on in the Limited Liability Partnership (LLP) Agreement. The company can enter into contracts and hold/buy property on its own name.
The company is registered under the Limited Liability Partnership Act, 2008 and does not require conducting any General Meeting.
Limited Liability Partnership (LLP)
Private Limited Company
Limited Liability Partnership Act, 2008
The Companies Act, 2013.
Every Limited Liability Partnnership Company must contain the ‘LLP’ word as suffix.
Private Company must have ‘Private Limited Company’ words as a suffix.
When the turnover is Rs.40 lacs or more or contribution is Rs.25 lacs or more.
A Private Limited Company needs to audit its account as per the provisions given under the Companies Act, 2013.
In case of LLP ownership can be transferred.
In case of private company ownership can be transferred by way of share transfer only.
Minimum- 2 partners
Maximum- unlimited partners
Minimum- 2 members
Maximum- 200 members
To be an investor or member of an LLP, the foreign nationals need to get prior approval of the Reserve Bank of India.
Foreigners are allowed to invest in a Private Limited Company without the requirement of any permission.
Annual Statutory Meetings
No requirement of any annual statutory meeting.
There is a provision to conduct Board Meetings and General Meetings by a Private Limited Company.
LLP Agreement denotes the scope of operation, rights and duties of the partners.
MOA (Memorandum of Association) and AOA ( Article of Association) are the charter document of the company.
Cannot be converted into a company.
Can be converted into LLP, Public Company and One Person Company.