Act, 1932 and a Company incorporated under Companies Act, 2013

Three classmates who plan a start-up ask their senior: should we register a private limited company or an LLP? Both give a separate legal person, both give protection from the business's debts, and both carry the word limited somewhere in the name. So why does the choice still matter so much? This topic, the last of the three that share one syllabus item, sets the LLP beside the company incorporated under the Companies Act 2013, using only the sections you can point to, and closes the comparison of all three forms.

In two minutes

Both an LLP and a company are bodies corporate with separate personality and perpetual succession, but an LLP is built on a partnership agreement among partners who are its agents, while a company is built on a memorandum and articles, with its own membership classes and types.

The rest of this chapter

The full explanation, the cheat sheet, every previous-year question at every mark weight, the quiz and the answer skeletons are part of Contract – II on LexBlox Semester. Sign in to unlock the subject, or read Module 1 of Legal Language and Writing free.