List the differences between the Limited Liability Partnership (LLP) and the Limited Liability Company. OR “A LLP (Limited Liability Partnership) is a type of partnership which provides the benefits of limited liability but allows its members the flexibility of organizing their internal structure as a partnership based on a mutually arrived agreement.” In line with the above statement clearly elaborate the difference between LLP and Limited Liability Company (LLC).

Distinction between LLP and Limited Liability Company: The points of distinction between a LLP and Limited Liability Company are tabulated as follows: Basis | LLP | Limited Liability Company Regulating Act | The LLP Act, 2008. | The Companies Act, 2013. Members/Partners | The persons who contribute to LLP are known as partners of the LLP. | The persons who invest the money in the shares are known as members of the company. Internal governance | The internal governance structure of a LLP is governed by contract agreement between the partners. | The internal governance structure of a company is regulated by statute (i.e., Companies Act, 2013). Name | Name of the LLP to contain the word “Limited Liability partnership” or “LLP” as suffix. | Name of the public company to contain the word “limited” and Pvt. Co. to contain the word “Private limited” as suffix. No. of members/ partners | Minimum – 2 members Maximum – No such limit on the members in the Act. The members of the LLP can be individuals/or body corporate through the nominees. | Private company: Minimum – 2 members Maximum 200 members. Public company: Minimum – 7 members Maximum – No such limit on the members. Members can be organizations, trusts, another business form or individuals. Liability of members/partners | Liability of the partners is limited to the extent of agreed contribution except in case of willful fraud. | Liability of a member is limited to the amount unpaid on the shares held by them. Management | The business of the company is managed by the partners including the designated partners authorized in the agreement. | The affairs of the company are managed by board of directors elected by the shareholders. Minimum number of directors/ designated partners | Minimum 2 designated partners. | Pvt. Co. – 2 directors. Public co. – 3 directors