LLP is usually best for small businesses. The businesses with annual sales turnover below 40 lakhs and capital contribution below 25 lakhs are best to be LLPs. All the businesses that meet these criteria do not have to go through an audit every year. On the other hand, a private limited entity must conduct an audit for every financial year.
Many LLPs have an annual turnover above 40 lakhs, including the capital contributor of above 25 lakhs. In such cases, the compliances for LLPs become almost similar to that of limited companies. Which force these owners to convert as a private limited company?
Corporatization has also become the need of the hour. The current market status demands every company to drive towards the global market. So, the start-ups interested in Corporatization must convert in private limited.