# LLP vs Limited Liability Company — A Comparative View

Basis	LLP	Limited Liability Company
Regulating Act	Limited Liability Partnership Act, 2008	Companies Act, 2013
Stakeholders	Persons contributing are called Partners	Persons investing in shares are called Members
Number of Partners/Members	Min 2 / No maximum. Partners can be individuals or body corporate (through nominees)	Private Co.: 2 to 200; Public Co.: 7 to no max. Members can be organisations, trusts, individuals, etc.
Name Requirement	Must contain 'Limited Liability Partnership' or 'LLP' suffix	Public Co.: 'Limited' suffix; Private Co.: 'Private Limited' suffix
Liability	Limited to agreed contribution (except in fraud)	Limited to unpaid amount on shares held
Management	By Partners and DPs as authorised in LLP Agreement	By Board of Directors elected by shareholders
Minimum Directors / DPs	Minimum 2 DPs	Private Co.: 2 directors; Public Co.: 3 directors

## Key Takeaways

LLP fuses ownership and management (partners run the business), while a company separates them (members own; directors manage).
A company has two distinct measures of liability: (i) what was promised on subscribed shares, of which (ii) the unpaid portion is recoverable. LLP simply caps liability at the agreed contribution.
A company has a maximum cap on private members (200) — LLP has no maximum on partner count.

Worked example

### Example 1

Q: Mr. X holds 1,000 shares of ₹10 each in a Pvt Ltd company, with ₹3 per share unpaid. What is his maximum liability?

A: Limited to the unpaid amount: 1,000 × ₹3 = ₹3,000. This is the conceptual contrast with an LLP partner whose liability is limited to his agreed contribution amount.

### Example 2

Q: Can a body corporate be a partner in an LLP?

A: Yes, through a nominee. (In a company, the equivalent is that a body corporate can hold shares as a member.)

### Example 3

Q: How many directors/DPs are mandatorily required in each entity?

A: LLP — 2 DPs; Private Company — 2 directors; Public Company — 3 directors.

⚠️ Common exam mistakes

Stating member liability in a company as 'limited to face value of shares' — it is limited to the unpaid amount on shares held.
Forgetting that a private company has a 200-member ceiling — LLP has no ceiling on partners.
Confusing minimum directors for public company (3) and private company (2).

Reference:

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Difference between LLP and Limited Liability Company

Worked example

⚠️ Common exam mistakes