LLP (Limited Liability Partnership) Guide - हिंदी में - YouTube

Press the bell icon while subscribing to get the notification of the latest finance videos.

Namaskar, my name is Mukul, and welcome to Asset Yogi.

Friends, when we want to start any business or want to start any startup.

So the biggest question came into mind what kind of company we should start.

Should we start a proprietorship company or a partnership firm?

we should Start a Limited Liability partnership or we should register a private company

If you want to work as a single owner then you can register a proprietorship firm

If you want to work with more than 2 or 3 people together,

Then you have 3 choices,

Partnership Firm, LLP, or private limited company

What are the advantages of a private limited company?

I've already made a video on it, if you haven't seen it yet.

So I will suggest you watch that video.

You will find the link in the description below.

In this video, particularly I will throw light on Limited Liability Partnership

which we call LLP in short form.

We will discuss its features

And we will discuss how LLP is different from a traditional Partnership firm

And form a Private Limited Firm.

And what kind of business partnership firm should we start?

In which type of business we should start the LLP firm

In what type of business should we start a private limited company?

We will know all this towards the end of the video

When we will see the complete comparison between the three companies.

Music

So let's first try to understand where the concept of LLP came from.

Earlier, if two or more people had to start a business then

we only had two options

Either we could start our partnership firm.

Or we could register a private limited company.

The partnership firm had its distinct advantages.

Flexibility was high, You can start your company in a single day.

You can run your business just by opening an account.

Compliance is very less.

The annual compliances,

For example, the compliances of tax to be audited.

All these compliances are more in a private company.

But a professional structure comes in business.

If you want to raise investment in the future.

So every investor prefers private limited companies to invest in.

Because shareholder agreement can be signed in it

And what will be the responsibilities of each shareholder?

Ownership and management may differ.

So, for this reason, a private limited company is preferred.

If you approach any investor.

Why do we need the concept of LLP?

See Private Limited Company has its benefits

And the partnership firm has its flexibility.

LLP is formed by the combination of these two.

You understand it in short.

So the advantages of a private limited company

were added to the LLP.

And the flexibility of the partnership firm is maintained

Then our LLP was formed.

The LLP is governed by the LLP act 2008.

Like the Partnership Act 1932 for partnership firms.

Companies Act 2013 applies to private companies.

Similarly, limited liability partnerships are built in India.

LLP Act 2008 is applicable for them.

And what are the other features of LLP?

As you register a private limited company

Similar LLP also has to be registered.

To the Registrar of Companies.

Minimum two directors and two partners are required for it

There is no maximum limit.

See if you go to a traditional partnership firm So at least two partners are needed in that too.

But in that, the limit of maximum partners is 20

and in a private limited company, the maximum number of shareholders are 200.

in the LLP there is no limit on the maximum number of partners

And foreign partners are also allowed in it.

What is another special feature of LLP?

That there is a perpetual succession in it.

Meaning if a partner died or went bankrupt.

Or for any reason if the partner is no longer.

Even then the company is not closed, it perpetually continues to run.

As a private company runs even if any of the shareholder exits or not,

But if we talk about traditional partnership firms then

If a partner dies or becomes bankrupt.

Or if for some reason partner does not continue then the partnership is dissolved

So this is also an advantage given in LLP.

So these were some of the features of LLP.

Now we compare LLP with a traditional partnership firm and a private limited company.

Let us see which type of firm will be better for us in which type of business

So see here I have written 5 types of points.

to Compare Partnership Firm LLP, Private Limited Company

Now, what are these 5 points?

First is the liability of the partner Or shareholders

The second is joint liability

The third which compliances are applicable in all three types of companies

What are the governing documents?

And the fifth point is the type of ownership and management

Once we understand how these three companies differ on these 5 points

So we will be able to decide which company we should start for our business.

Look, let me tell you that no company is bad.

Depends on what your requirement is.

So let's try to understand.

When we talk about partnership firms and when we talk about liabilities of partners.

So I also told in my previous video that in a traditional partnership firm all the partners

Have unlimited liability,

What is meant by Unlimited Liability ?

all personal assets of all partners are also liable to be sold.

Let's say A company got loans or liabilities of 50-60 lakhs.

And the company does not have sufficient money to pay them.

So all the personal assets of the partner will be sold.

And then all the liabilities of the company will be cleared.

That's why here.

This is its biggest disadvantage.

But yes it has advantages too.

We will also talk about its advantages

So this is the biggest disadvantage of partnership firms.

The personal assets of the partners can also be sold.

and another

Along with this, I also discuss joint liability. See what is meant by joint liability ?

that all the partners, let's say there are three partners.

and one has a 40% share Let say Both have a 30% share

So Joint liability is created.

Let say the shareholder of 40% has zero assets,

So all the assets of the remaining 30-30% of shareholders will be sold

and the liabilities of the company will be cleared.

It means joint liability is in the partnership firms. All Partners are Unlimited Liable.

So keep these two things in mind.

This is the biggest disadvantage of partnership firms

Now let's talk about LLP, so here limited liability is given

As I said in a private limited company the liability of shareholders is limited.

What they have invested the initial capital shares

only that will be their liabilities.

No one will touch their assets.

Company assets can be sold

All the assets of the company can be sold.

The amount of money in the name of the company,

The money of the company will be used to clear the liability of the company.

But no one can touch the personal assets of the shareholders or partners.

So this is the biggest advantage of a private limited company or LLP.

So there is limited liability in both cases.

Also,there is no joint liability

Means let say If any shareholder in a Limited Liability Partnership

And he has a 40% share so his liability will not be 70% or 80%.

His liability will be limited to that 40% only.

So it is not a joint liability

So these are the advantages of LLP and Private Limited Company.

And this is the disadvantage of the partnership company.

Now we will talk about compliances

So as mentioned earlier,

in partnership, ROC, audit, tax,compliances are very less.

Here I will write the least

There are compliances in LLP at some level

Here I will write medium

It is not so low that we can compare it with the partnership firm.

But in LLP if your turnover is more than 40 lakhs.

So it becomes compulsory to get the audit done.

If your company's capital is above 25 lakhs.

Even then it becomes compulsory to get an audit done.

Whatever is your turnover in a private limited company.

Even if you are in the loss

Even then, a tax compliance audit is a must.

you have to do it at any cost.

So I write compliance high here

A private limited company has to do all the compliances

Now let's talk about the governing documents.

Your partnership deed is signed in the partnership firm.

According to it, it is decided how the company will run.

What is the percentage of each partner's shareholding in the company?

Similar an agreement is signed in LLB.

And according to that agreement the company gets started.

You don't need to do much in this either.

Like in a private limited company you need more documentation.

Here your Memorandum of Association is signed.

One is your Articles of Association.

And here the shareholder agreement is also signed.

It is written in the shareholder agreement that

what will be the responsibilities of the shareholder?

Here is another difference.

Ownership and management is the same

The partners are the owners of the business and they also manage the business

It is the same in LLP also. And here

If we talk about private limited companies, it can be different here.

Here I will write different

What does different mean? May the ABC be your shareholder

And XYZ can be management.

You must have seen that there are many big companies, for example, Tata.

Tata Sons holds the highest shares, but management

CEO and all their management employees are different

So in private limited company

Ownership and management may vary.

That's why I said earlier

That Private Limited Company is a structural organization.

And you do not get structured in LLP and partnership.

So we have seen the comparison of all the three companies.

Now the question arises which type of company should we choose for our business?

First of all, let's talk about the traditional Partnership Firm.

So I will suggest Small businesses and family businesses where you can trust your partner.

As Husband and Wife are the partners in a Partnership Firm

Or a person with blood relation is in partnership

Or you have very special people whom you can trust.

So you can go with a Partnership Firm,

Because here you can start your business quickly and Compliances are not high

and the expenses are low, Second, if we talk about LLP

If you want to start a business with professional partners

And you don't want to go through a lot of compliances because

The cost of compliance is also very high. Then you should go with an LLP.

And the third type of company is a private limited company.

If you want to give a formal structure to your company

then you should go with a private limited company.

I will tell you its features. You also have limited liability in LLB.

But in the private limited company, there is a proper shareholder agreement.

If you want to give your employees stock options then you can.

If you think in the future that you want to list your company on the stock exchange.

So that is also possible.

LLB cannot be listed on the stock exchange.

And if you want to raise investment in your company in future

Especially if we talk about equity investment, So venture capitals

and all the private equity firms prefers private limited companies

Because they do not get a proper structure in LLP.

As I told you earlier, their owners and managers are the same

But ownership and management are different things in a private limited company.

So you can give them shareholding in a private limited company.

They know how much percent shareholding is mine

And this is my responsibility. Maybe a person only invests money

and doesn't work, that means that person is not part of the management.

But he became a shareholder in the company.

So if you want to give a formal structure to your company

And want to raise investment in the future,

So you should go with a Private Limited Company.

So that's all in this video.

I hope after watching this video you have got an idea

which company you should choose for your business.

If you liked this video, then do like and share it.

If you have some suggestions related to this topic or related to the channel,

So you can tell us in the comments below.

You can also suggest topics for future videos.

If you haven't subscribed to the channel yet, then please subscribe from below

and press the bell icon on your phone.

So you get the notification of the latest video.

See you in the next informative video.

Till then keep learning and keep earning

And be happy as always.