Jayesh Keshwani .

As an investor, what is more attractive to invest in? A LLP or a Pvt Ltd company?

Originally Posted Here
24 Comments

Vaibhav Gupta

Private limited only.

LLP's are not even in the scope of their interests.

Prahllad Mittal

Even if you are a llp, you have to convert to pvt ltd before raising funds

Jayesh Keshwani

thanks for letting me know. Why is that so?

Prahllad Mittal

may be ownership transfer option is not available in llp

Rishank Bharatiya

In starting investor don't think much about company registration...

They think about...
1) Product & Team
2) Market of the product
3) Revenue model
4) previous finance record (if any)

After that when deel will be finalized then they will register Pvt. Ltd. If not registered previously OR they will take equity share, if company previously registered.

Shivam Malhotra

most of them take CCPS most of the times (which can obviously be converted to equity shares)🙂

Jayesh Keshwani

I agree. Can you please guide me, is there a set revenue model to follow?
I'm not from financial background - but in physics when we have to build thesis there is just one formula to use to get to the end result. Is there anything similar to that in revenue models? Thank you and apologies if it sounds horrid lol.

Dheeraj Mehndiratta

Well, Pvt Ltd saves your interest legally more than LLP due to its norms. Plus, A co., When formed becomes a seperate entity , individuals may come n go and change but co. remains in existence as per law. Whereas LLP n partnership has to be altered, shut n make new one in order to make any change in ownership.

Goutham Bhat

Private Limited company
But for some businesses LLP works

Harshal N Shroff

Are you debt or an equity Investor ?

Jayesh Keswani

I'm not an investor. Asking from their perspective.😊

Harshal N Shroff

reframing are you looking to raise debt or equity ?

Jayesh Keswani

Equity

Harshal N Shroff

so you need shares i.e a private limited Company by shares

Amit Prakash Nayak

I will suggest for LLP

Adv Gurudatta Barge

Pvt ltd only

CA Gaurav Sukhija

PLC always
LLP doesnot give an option of issuing CCPS
And investor would always want to have different class of share than normal equity shares
Hence these things afe possible only in a PLC and not in an LLP
Plus u cant issues shares in LLP therefore only PLC is an option

Mohit Bansal

An investor will always have more trust in limited company than LLP, reasons
1. The Pvt Ltd company has better visibility and transparency for third party investors as every record related to the company needs to be filed with ROC. Investors can easilyverify the records provided by investee company with ROC.
2. Company has better flexibility in terms of shares transfer, a single share transfer form needs to be filed with ROC. Whereas in LLP, you have to amend LLP agreement every time when a new sharing partner comes or go
3. Audit of Company accounts is mandatory irrespective of the turnover, not mandatory in LLP, hence investors will always have more trust on audited statements

Shitij Malhotra

I proper investor will choose pvt Ltd while a friend or family will be ok with llp

Pvt Ltd has one massive advantage
You can sell some shares or all shares to anybody at anytime which means an investor can take a part exit, full exit and also exit to another person who is not the founder

Pvt Ltd also has segregation between shareholders, directors and management which also helps
Pvt Ltd is also always audited and heavily regulated which makes it safer for a stranger to invest in
LLP has many of these features but because it is new, it is not the common practice

Jayesh Keswani

Thank you for your inputs. How about starting off as LLP and switching to Pvt in the future?

CA Gaurav Sukhija

no I wouldn’t suggest that
As anyone who is planning to raise funds might need funds within one year
Or may start looking for investors in first year
So It would unnecessarily increase cost of first registering an LLP and then converting it to a PLC

NEW PAN
NEW GST
NEW BANK ACCOUNTS
I dont see any benefit of this

Hitz Gupta

Always pvt.ltd

Devyash Patel

Always go with the Private limited Company Registration & if you need Registration just DM me or Checkout Here at Offer Price

https://www.myonlineca.in/private-limited-company-registration.html?fbclid=IwAR1UqSXRx_R-wYLOSyP2ASR6Hav6WYZri75jzh-DSxS4wTnT2xQ3347E6Vc

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