LLP vs. Sole Proprietorship: Which is Right for the Companies?
Understanding LLP and sole proprietorship While starting a business one of the most critical aspect is to decide on the choice of business structure. Two of the popular choices include limited liability partnership (LLP) and sole proprietorship. Each structure comes with its own unique set of advantages and disadvantages. It impacts everything from legal liability and taxation to administrative responsibilities and growth potential. Understanding the technicalities LLPs and sole proprietorships is essential to making an informed choice that aligns with the company’s business goals, risk tolerance, and long-term vision. 1.Formation and Setup: LLP vs. Sole Proprietorship In a sole proprietorship, the formation process is straightforward and requires minimal paperwork. In most cases, registering a trade name and obtaining necessary licenses are the primary steps. This simplicity makes it an ideal choice for individuals starting a small business or freelance practice. Setting up a Limited