Sole Proprietorship VS Limited Liability Partnership VS Private Limited Company
Sole Proprietorship:
Owned by a single individual, who bears full responsibility and liability for the business.
The personal and business finances of the owner are not separated, meaning the owner’s personal assets may be used to settle business debts.
Simple management, low cost, but higher risk.
No need for company registration, but may require a business license.
Limited Liability Partnership (LLP):
Formed by two or more partners, each having limited liability for the debts and obligations of the business, restricted to their investment.
Rights and obligations among partners are governed by a partnership agreement.
LLP has a separate legal personality, enjoying a degree of legal and financial independence.
Provides more legal protection and greater access to funding compared to sole proprietorship.
Private Limited Company:
Requires at least two shareholders, but can have up to 50 shareholders.
The company has a separate legal personality, and shareholders’ liability is generally limited to their shareholding.
The company’s finances and business activities are separated from the personal finances of shareholders.
Must comply with more legal and financial regulations, including registration and annual reporting.
Provides a more reputable and professional image compared to the other two business structures, with greater financing options.
