{"id":8882,"date":"2022-05-24T07:10:29","date_gmt":"2022-05-24T07:10:29","guid":{"rendered":"https:\/\/www.kanakkupillai.com\/new-learn?p=8882"},"modified":"2025-05-22T14:53:43","modified_gmt":"2025-05-22T09:23:43","slug":"features-and-advantages-of-various-business-entities","status":"publish","type":"post","link":"https:\/\/www.kanakkupillai.com\/learn\/features-and-advantages-of-various-business-entities\/","title":{"rendered":"Features and Comparison of Various Business Entities"},"content":{"rendered":"

Comparison of Proprietorship vs Partnership vs LLP vs Private Limited<\/h2>\n

When beginning a new firm, one of the first legal decisions an entrepreneur makes is to choose a business entity. With the passage of the Limited Liability Partnership<\/strong><\/a> Act and the Companies Act of 2013, business entities now have more options. As a result, the Entrepreneur or Promoter must grasp the benefits and drawbacks of each company organization before selecting the best one. Few For-Profit structures, such as a proprietorship, Partnership, limited Partnership, and private limited company<\/strong><\/a>, are suitable for most entrepreneurs.\u00a0Proprietorship,<\/strong><\/a>\u00a0<\/strong>Partnership,<\/strong><\/a>\u00a0LLP, and Private Limited\u00a0<\/strong>are the types of entities we are comparing in this article.<\/p>\n

\u00a0<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Features<\/strong><\/td>\nProprietorship<\/strong><\/td>\nPartnership<\/strong><\/td>\nLLP<\/strong><\/td>\nPrivate Limited Company<\/strong><\/td>\n<\/tr>\n
Registration<\/td>\nProprietorship does not require any legal registration.<\/td>\nThere are two types of partnerships: registered and unregistered. It is not necessary to note your collaboration. If your Partnership is registered, it is governed by the Partnership Act of 1932.<\/td>\nThe Limited Liability Partnership Act of 2008 will be used to register LLPs with the Ministry of Corporate Affairs.<\/td>\nUnder the Companies Act<\/span> of 2013, a private limited company will be registered with the MCA or the Ministry of Corporate Affairs.<\/td>\n<\/tr>\n
Name of the Entity<\/td>\nThe Proprietorship Proprietorship after the Promoter\u2019s choice is not required to obtain permission before using a name; nonetheless, trademarked names should be avoided.<\/td>\nThe Promoters might name the Partnership. Although permission is not required before using a name, trademarked names<\/span> should be avoided.<\/td>\nThe Registrar of Companies must authorize the Promoter\u2019s name. Promoters that are not identical or similar to those of another business or LLP, as well as names that are not objectionable or unlawful, would be permitted. The entity\u2019s name will include the terms \u201cLimited Liability Partnership\u201d or \u201cLLP\u201d at the end.<\/td>\nThe Registrar of Companies must authorize the Promoter\u2019s name. Promoters that are not identical or similar to those of another business or LLP, as well as names that are not objectionable or unlawful, would be permitted. The entity\u2019s name will conclude with the words \u201cPrivate Limited Company.\u201d<\/td>\n<\/tr>\n
Legal Status of the Entity<\/td>\nThe Promoter is the Proprietorship since the Proprietorship was established as a distinct legal organization.<\/td>\nThe promoters are individually accountable for the Partnership\u2019s liabilities. The Partnership is not recognized as a separate legal entity.<\/td>\nThe LLP Act of 2008 defines a limited liability partnership as a separate legal organization. An LLP\u2019s partners are not individually accountable for the LLP\u2019s obligations.<\/td>\nThe Companies Act of 2013 defines a private limited company as a separate legal entity. Its directors and Shareholders are not individually accountable for the company\u2019s debts.<\/td>\n<\/tr>\n
Liability of Members<\/td>\nThe Proprietor has limitless responsibility and is accountable for the Proprietorship.<\/td>\n\u00a0Limitless responsibility and are accountable for the Partnership\u2019s results.<\/td>\nPartners are only accountable for the level of their contribution to the LLP and have limited liability.<\/td>\nShareholders have limited responsibility and are only responsible for the value of their shares.<\/td>\n<\/tr>\n
Minimum Number of Members<\/td>\nA single person can be a member of the group.<\/td>\nTo form a partnership, you\u2019ll need at least two people.<\/td>\nTo form an LLP, you\u2019ll need at least two people.<\/td>\nTo form a Private Limited Company, you\u2019ll need at least two people.<\/td>\n<\/tr>\n
Maximum Number of Members<\/td>\nOnly one individual may be a member.<\/td>\nThere may only be a maximum of 20 partners.<\/td>\nA limited liability partnership (LLP) can have an infinite number of partners.<\/td>\nThe maximum number of shareholders or members in a Private Limited Company is 200.<\/td>\n<\/tr>\n
Foreign Ownership<\/td>\nStarting a Proprietorship is not permitted for foreigners.<\/td>\nForeigners are prohibited from forming a partnership.<\/td>\nForeigners can invest in a limited liability partnership (LLP) only with the authorization of the Reserve Bank of India and the Foreign Investment Promotion Board (FIPB).<\/td>\nIn most areas, foreigners are permitted to participate in a Private Limited Company using the Automatic Approval procedure.<\/td>\n<\/tr>\n
Transferability<\/td>\nIt is not transferable.<\/td>\nIt is not transferable.<\/td>\nThe ownership can be transferred.<\/td>\nOwnership transfer can be done by way of the transfer of shares.<\/td>\n<\/tr>\n
Existence<\/td>\nA Proprietorship business\u2019s survival is contingent on the Proprietor.<\/td>\nThe Partners are responsible for the Partnership\u2019s affairs; if a partner, the relationship may be at risk of breakup.<\/td>\nThe existence of an LLP is not contingent on the presence of its partners. Only voluntarily or by order of the Company Law Board may it be dissolved.<\/td>\nA Private Limited<\/span> Company\u2019s existence is not contingent on the presence of Directors or Shareholders. It may be disbanded only voluntarily or by Regulatory Authorities.<\/td>\n<\/tr>\n
Taxation<\/td>\nTaxed as an individual, depending on the Proprietor\u2019s total income.<\/td>\nProfits from a partnership are the Proprietor\u2019s plus any relevant surcharges and cess.<\/td>\nProfits from an LLP are taxed at 30% plus any relevant surcharges and cess.<\/td>\nProfits from a private limited company are taxed at 30% plus any relevant surcharges and cess.<\/td>\n<\/tr>\n
Annual Meetings<\/td>\nThere are no legal requirements to hold yearly statutory meetings.<\/td>\nThere are no legal requirements to hold yearly statutory meetings.<\/td>\nThere are no legal requirements to hold yearly statutory meetings.<\/td>\nBoard Meetings and General Meetings should be conducted on a periodic basis.<\/td>\n<\/tr>\n
Annual Filings<\/td>\nThere are no obligations to file an annual report with the Registrar of Companies. The Proprietorship\u2019s<\/td>\ncommitments to the Registrar of Companies for yearly reports. A partnership return is required for the Partnership.<\/td>\nEach year, LLPs must file an Annual Statement of Accounts and Solvency as well as an Annual Return with the Registrar. The LLP must also file an income tax return.<\/td>\nEvery year, the Registrar of Companies requires Private Limited Companies to produce Annual Accounts and Annual Returns. The Private Limited Company must also file an income tax return.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Comparison of Proprietorship vs Partnership vs LLP vs Private Limited When beginning a new firm, one of the first legal decisions an…<\/p>\n","protected":false},"author":1,"featured_media":8903,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"categories":[5,9],"tags":[],"class_list":{"0":"post-8882","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business-tips","8":"category-general"},"yoast_head":"\nFeatures and Comparison of Various Business Entities<\/title>\n<meta name=\"description\" content=\"Features and Comparison of Various Business Entities - Proprietorship vs Partnership vs LLP vs Private Limited Company are the types of entities we are comparing in this article.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.kanakkupillai.com\/learn\/features-and-advantages-of-various-business-entities\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Features and Advantages of Various Business Entities\" \/>\n<meta property=\"og:description\" content=\"Features and Advantages of Various Business Entities - 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Contact us today to learn more.","sameAs":["https:\/\/www.kanakkupillai.com\/learn\/"],"url":"https:\/\/www.kanakkupillai.com\/learn\/author\/expert\/"}]}},"modified_by":"Kanakkupillai","_links":{"self":[{"href":"https:\/\/www.kanakkupillai.com\/learn\/wp-json\/wp\/v2\/posts\/8882","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.kanakkupillai.com\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kanakkupillai.com\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kanakkupillai.com\/learn\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kanakkupillai.com\/learn\/wp-json\/wp\/v2\/comments?post=8882"}],"version-history":[{"count":2,"href":"https:\/\/www.kanakkupillai.com\/learn\/wp-json\/wp\/v2\/posts\/8882\/revisions"}],"predecessor-version":[{"id":37830,"href":"https:\/\/www.kanakkupillai.com\/learn\/wp-json\/wp\/v2\/posts\/8882\/revisions\/37830"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.kanakkupillai.com\/learn\/wp-json\/wp\/v2\/media\/8903"}],"wp:attachment":[{"href":"https:\/\/www.kanakkupillai.com\/learn\/wp-json\/wp\/v2\/media?parent=8882"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kanakkupillai.com\/learn\/wp-json\/wp\/v2\/categories?post=8882"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kanakkupillai.com\/learn\/wp-json\/wp\/v2\/tags?post=8882"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}