Brief Comparison between a Private Limited and Limited Liability Partnership

Particulars
Recognition

Reporting
Requirements

Private Limited Company

Widely
recognized
amongst
business
partners,
statutory
authorities and other stakeholders.

The Companies Act, 2013 requires

various regulatory formalities and
compliances
Acceptance
of Stringent Provisions
and
in
Funds
particular Section 73 restrict
acceptances of loans from persons
other than directors. This Limits
Sources of funds.
Stringent Provisions prohibits the
Loans to Related lending of Loans to Related Parties,
parties
Acceptances of Monies from
outsiders,
Restrictions
on
Borrowings/Investments.
Multiple Objects
The Main objects that a Company
can pursue are limited to 2(two).
Penal Provisions
Many of the provisions levy
penalty/fine which extends upto
Twenty Five Lacs on every Director.

Limited Liability Partnership

Though
having
all
the
advantages of a corporate
entity and flexibility of a
partnership firm, it is yet not
popular. However, as per
official data, the number of
registrations since 2014 have
increased.
Disclosures and reporting to the
statutory authority is very
limited.
Funds
for
business
requirements can be obtained
from third parties.

Flexible provisions permit the

granting of loans to partners/
related parties.

Multiple Business may be

carried on
The monetary penalties are not
as much harsh in comparison.