LLP vs Private Limited Company: Which Is Better for Your Startup?
Starting a business is one of the most important decisions an entrepreneur makes, but choosing the right legal structure is just as critical. In India, startups often find themselves confused between two popular options: Limited Liability Partnership (LLP) and Private Limited Company (Pvt Ltd) . Both structures offer limited liability and legal recognition, yet they differ significantly in terms of compliance, taxation, funding potential, and long-term scalability. This article explains the differences in simple language to help you decide which structure suits your startup best . Understanding LLP and Private Limited Company Before comparing, it’s important to understand what each structure means. What is an LLP? A Limited Liability Partnership combines the flexibility of a partnership with the benefit of limited liability. Partners are not personally responsible for business losses beyond their agreed contribution. LLPs are governed by t...