Can we convert Company into the LLP? What is the difference between Private Company and LLP?

Can we convert Company into the LLP? What is the difference between Private Company and LLP?

Yes, a Company can be converted into a LLP and the whole transaction shall remain tax exempt if condition under section 47 of income tax act, is fulfilled. Further, the difference between the private Company and LLP is as follows:

Private Limited Company

Limited Liability Partnership

It is the superior form of business than LLP and hence better than LLP. It is registered under Companies Act, 2013.

It is the latest form of partnership which is registered under limited Liability Partnership Act, 2008.

Private Limited Company offers funding option from the VC, angel investors etc.

LLP does not offer this feature and hence funding option is not available.

Innovative measure like ESOPs can be used under private company

LLP cannot offer ESOPS options and hence not preferred for startups.

Compliance cost is high as compared to LLP.

Compliance cost is low as compared to Private Company


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