Name Dattatraya Venkat Budhware

Roll No 2022047

ASSIGNMENT -1

Subject: Start-Up and New Venture Management

1) Differentiate between Sole- Proprietorship Firm, Partnership Firm, Private Limited

Company, Public Limited Company & Limited Liability Partnership.

 Definition
Sole-Proprietorship Firm :-A sole proprietorship (also known as individual entrepreneurship,
sole trader, or simply proprietorship) is a type of an unincorporated entity that is owned by one
individual only. … In other words, the identity of the owner or the sole proprietor coincides with
the business entity.

Partnership Firm :-A partnership is an arrangement where parties, known as business partners,
agree to cooperate to advance their mutual interests.
Private Limited company :- In a limited company, the liability of members or subscribers of the
company is limited to what they have invested or guaranteed to the company.
Public limited company :- A PLC designates a company that has offered shares of stock to the
general public. The buyers of those shares have limited liability.

Limited Liability partnership :- A limited liability partnership is a partnership in which some or

all partners have limited liabilities

 Members Liability

Sole-Proprietorship Firm :-A sole proprietorship suffers from unlimited liability.

Partnership Firm :- Partners have unlimited liability and is responsible for all the liabilities of the
Partnership

Private Limited company :-Shareholders have limited liability and is liable only to the extent of
their share capital.

Public limited company :-The liability of a public company is limited. No shareholder is

individually liable for the payment. The public limited company is a separate legal entity, and
each shareholder is a part of it.

Limited Liability partnership :- Partners have limited liability and is liable only to the extent of
their contribution to the LLP.

 Registrations
Sole – Proprietorship Firm :- Sole Proprietorship registration is not Brand Name registration. In
a sole proprietorship there is only one owner and hence the control of the business is always
with the owner.

Partnership Firm :- The registration of a partnership firm is optional and not compulsory under
the Indian Partnership Act. It is at the discretion of the partners and voluntary.

Private Limited company :-Private Limited Company will be registered with the Ministry of
Corporate Affairs under the Companies Act, 2013.

Public limited company :- There are various rules and regulations prescribed under the
companies act, 2013 for the formation of a public limited company.
Limited Liability partnership :- LLP will be registered with the Ministry of Corporate Affairs
under the Limited Liability Partnership Act, 2008.

 Minimum Number of Members

Sole- proprietorship firm :-Can have only one person as member.

Partnership Firm :-A minimum of two persons are required to start a Partnership

Private Limited company :- A minimum of two persons are required to start a LLP.

Public limited company :- A minimum of two persons are required to start a Private Limited
Company.

Limited Liability partnership :- limited liability partnership at least two members are required
initially
  Maximum Number of Members

Sole-Proprietorship :- Can have only one person as member.

Partnership Firm :- The maximum number of partners can be only 20

.
Public Limited Company :- there is no upper limit to the number of members that a public
limited company can have.

Limited Liability partnership :- A LLP can have unlimited number of Partners.

Private Limited Company :- A Private Limited Company can only have a maximum of 200
shareholders or members.

 Legal Status of Entity

Sole-Proprietorship :-Proprietorship is not recognised as a separate legal entity and the

promoter is personally liable for the liabilities of the Proprietorship.

Partnership Firm :- Partnership is not recognised as a separate legal entity and the promoters
are personally liable for the liabilities of the partnership.

Public Limited Company :- Separate Legal Entity: Public limited company legal entity are
separate than its shareholders/promoters. ... Capacity to Sue and to be Sued: Public limited
company can take legal action against another and also other person can take legal action
against company separate from directors, shareholders & promoters
Limited liability partnership :- LLP is a separate legal entity registered under the LLP Act, 2008.
The partners of a LLP are not personally liable for the liabilities of the LLP.

Private Limited Company :- Private Limited Company is a separate legal entity registered under
the Companies Act, 2013. The Directors and Shareholders of a Private Limited Company are not
personally liable for the liabilities of the Company.

 Foreign Ownership

Sole-Proprietorship :- Foreigners are not allowed to start a Proprietorship.

Partnership Firm :- Foreigners are not allowed to start a Partnership.

Limited liability company :- Foreigners are allowed to invest in a LLP only with prior approval of
Reserve Bank of India and Foreign Investment Promotion Board (FIPB) approval.

Private Limited Company :- Foreigners are allowed to invest in a Private Limited Company
under the Automatic Approval route in most sectors