Question

Discuss the differences between LLC and LLP. Which one of them is more attractive to you?

Discuss the differences between LLC and LLP. Which one of them is more attractive to you?

Homework Answers

Answer #1

In an LLP, there is not a clear distinction between the owners and management. In an LLP, the LLP Partners hold ownership of the LLP and also hold powers to manage the LLP. Therefore, a Partner in an LLP will be both an owner and a manager, whereas, in a Private Limited Company (LLC), the shareholders (owners) do not necessarily have to have management powers. A private limited company is recommended for any business that is considering FDI or Employee Stock Options or Equity funding or Venture Capital funding.

Both have their own benefits if you want to control the management you can go for LLP but if you want to attract more capital and can compromise with control on the business go for the LLC.

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