Many budding entrepreneurs often have a doubt between Limited Liability Partnership and a Public Limited Company. To ease your doubts, read this article and find out how is Limited ...
4 min read
Many budding entrepreneurs often have a doubt between Limited Liability Partnership and a Public Limited Company. To ease your doubts, read this article and find out how is Limited Liability Partnership different from Public Limited Company.
Putting it simply, when a partnership between two or more partners are registered with the Ministry of Corporate Affairs under the Limited Liability Partnership Act, 2008, it is known as a Limited Liability Partnership. Some people also refer to an LLP as a Limited Liability Company also though that is not quite correct as partnerships and company are two different entities entirely. The LLP is registered under a name provided by the partners and approved by the Registrar of Companies (RoC). One of the main advantages of registering a partnership as an LLP is that one partner is not liable or responsible for the negligence or misconduct on the part of the other partners.
[Also read: Private Limited Company Registration: Steps To Register Your Company]
Difference between Limited Liability Partnership and public limited company are many. A public limited company grants limited liability to the owners and managers of a company. Setting up a limited company is slightly more difficult as you need at least three directors and seven shareholders or members to get a certificate of incorporation. A PLC can sell shares to investors to raise capital. A Public Limited Company needs to be registered under the Companies Act, 2013 with the Registrar of Companies (RoC). The regulatory requirements for a PLC are more stringent as compared to other kinds of partnerships or companies. A PLC can issue secured as well as unsecured debentures, and also raise capital by offering shares to the public.
[Also read: Planning To Start A Company? Here Is How You Can Do It]
Hope this article helped you understand the difference between a Limited liability partnership and public limited company, a Limited Liability Partnership is ideal for start-ups and small businesses whereas a Public Limited Company is the best option for a medium to large sized business.
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