Start with Search - Type your requirement here

Monday, January 19, 2009

[LLP Act download]Similarities & Distinctions with Company + Partnerships

Limited Liability Partnership Act, 2008 - LLP's are now possible in India too. Click here to download the Act http://mca.gov.in/MinistryWebsite/dca/actsbills/pdf/LLP_Act_2008_15jan2009.pdf

Yes, LLP is formed & regulated by Limited Liability Partnership Act, 2008 which received President's assent on 7th January 2009.

Ministry of Corporate Affairs (MCA) is administrating ministry - Ministry of Corporate Affairs, Government of India is the administrating ministry. Registrar of Companies (RoC) of respective State is the administrative authority where all documents are to be filed.

Provisions of Companies Act can be made applicable - Central Government can make applicable any provision of Companies Act to LLP with suitable modifications by issuing a notification [Section 67 of LLP Act, 2008]

However, provisions of Indian Partnership Act will not apply to LLP [Section 4 of LLP Act, 2008].

Individual or body corporate can be partner, that too with a limited liability protection now - Any individual (who is of sound mind and is solvent) and any body corporate can be partner of LLP. There should be minimum two partners. Personal liability if number falls below two. No upper limit on number of partners [Section 5 and 6 LLP Act, 2008].

LLP must have two 'designated partners' who must be individuals. If a body corporate is partner of LLP, it can nominate a person as 'designated partner'. He has to give consent to act as designated partner. He has to obtain DPIN [Designated Partner Identification Number] from Central Government [Section 7 of LLP Act, 2008]. The designated partner is liable for all compliances as required under the Act and is liable to penalty for contravention of those provisions [Section 8 of LLP Act, 2008].


Comparison between traditional partnership and LLP

Traditional Partnership

Limited Liability Partnership

Distinctions

Unlimited personal liability of each partner for dues of the partnership firm. Personal property of each partner also liable.

No personal liability of partner, except in case of fraud.

Written agreement not essential.

Incorporation document essential.

Partnership can be registered under Partnership Act. Registration is not mandatory.

LLP is incorporated under LLP Act. Incorporation is mandatory.

Not a legal entity separate from its partners

It is a legal entity separate from its partners, having perpetual succession

Property cannot be held in name of partnership firm.

Property can be held in name of LLP.

Partnership deed/agreement is executed. Even verbal agreement is valid.

'Incorporation Document' is required to be executed. In addition, LLP Agreement is required in almost all cases, though such LLP agreement is not mandatory.

Documents are required to be filed with Registrar of Firms (of respective State)

Registrar of Companies (ROC) is the administrating authority.

Death of partner dissolves a firm, in absence of agreement

Death of partner does not dissolve LLP.

Minimum two and maximum twenty partners

Minimum two partners. No limit on maximum number of partners

Each partner can take part in business of firm.

Each partner can take part in business of firm, but LLP Agreement can provide to the contrary.

All partners are liable for statutory compliances under Partnership Act

Only designated partners are liable for statutory compliances as are required under LLP Act (not necessarily in respect of other Acts).

Partner cannot enter into business with firm, though he can give loan to firm.

Partner of LLP can enter into business with LLP. He can also give loans to LLP.

Every partner of firm is agent of firm and also of other partners. He can bind partnership firm as well as other partners by his acts.

Every partner of LLP is agent of LLP but not of other partners. Thus, he can bind LLP by his acts but not other partners. However, LLP agreement can restrict powers of individual partner.

Filing of accounts, statement of solvency and annual return not required.

Filing of accounts, statement of solvency and annual return not required.

Partnership can be 'at will' i.e. any partner can resign or dissolve firm

Individual partner can resign but cannot dissolve the LLP.

Death of partner dissolves partnership unless there is contract to contrary

Death of partner does not dissolve LLP.

Public notice is required for retirement of a partner.

Filing of return of retirement of partner with ROC is required, but no provision for public notice of retirement of partner.

Partnership firm can be dissolved.

LLP can be would up.

No specific provision to enter into compromise, arrangement, amalgamation, reconstruction etc. This can be done only under civil laws.

LLP can enter into compromise, arrangement, amalgamation, reconstruction etc.

Minor can be admitted to benefit of partnership.

There is no specific provision to admit minor to benefit of partnership. It is doubtful if this can be done.

Similarities

Partner is not employee of firm

Partner is not employee of LLP.

Liability of a person for 'holding out', i.e. representing himself as partner, though he is not

Liability of a person for 'holding out' i.e. representing himself as partner, though he is not [clause 29 of LLP Bill, 2008]

Partner of firm entitled to remuneration only if partnership agreement so provides

Partner of LLP entitled to remuneration only if LLP agreement so provides

New partner can be introduced only with consent of all existing partners

New partner can be introduced only with consent of all existing partners, unless LLP Agreement provides otherwise.

Insolvent person cannot continue as partner of firm.

Insolvent person cannot continue as partner of LLP.

Rights of partnership can be assigned.

Rights of partnership can be assigned.

Partner liable to firm for any personal profits made by him by use of property, name or business connection of firm.

Partner liable to LLP for any personal profits made by him by use of property, name or business connection of LLP

Partner cannot undertake competing business without consent of other partners

Partner cannot undertake competing business without consent of LLP. Otherwise, liable to account for and pay profits to LLP

Partner liable to firm if he commits fraud.

Partner liable to LLP if he commits fraud.


Comparison between company and LLP

Company under Companies Act

Limited Liability Partnership

Distinctions

Memorandum is to be filed with ROC

Incorporation Document is required to be filed.

Memorandum should contain State in which incorporated.

Incorporation Document is not required to contain State in which incorporated. Thus, registered office can be changed to any place in India just by informing ROC subject to prescribed conditions.

Name to contain 'Limited' or 'Private Limited' as suffix

Name to contain 'Limited Liability Partnership' or 'LLP' as suffix

Articles are to be filed at the time of incorporation. Private company must have Articles. In case of public company, provisions of Table A apply if there are no Articles.

LLP Agreement is required to be filed later. In absence of LLP Agreement, mutual rights and duties will be as specified in first schedule to LLP Act. Thus, practically, each LLP must have LLP Agreement, though not mandatory.

Managing Director and Wholetime Director to look after day to day administration..

Designated Partner to look after statutory compliances. Otherwise, all partners can look into affairs of the LLP. However, LLP can delegate powers to some partners who may be designated as 'Managing Partner', or 'Executive Partner' or any other name.

Individual director or member does not have authority in conduct of business of company.

Every partner has authority to conduct business of LLP, unless the LLP Agreement provides to contrary.

Restrictions on remuneration to director as per Companies Act

No restriction on remuneration to partner. Remuneration should be provided in LLP agreement.

Notice of change of director is to be given by company.

A partner who has resigned from LLP can himself file notice of his resignation to ROC.

Share, share certificate, register of members, transfer and transmission of shares etc. required.

No requirement of share and share certificate. Hence, no question of its issue, allotment, transfer, rectification of register etc.

Board meetings, general meetings are required.

No provision for regular meeting of Board and members. Partners can decide when and how to meet, delegation of powers etc. Provision is made that LLP should maintain minute book

Charges are required to be registered

No provision for registration of charges.

Elaborate records and registers are required to be maintained

No records and registers have been prescribed.

Restrictions on Board regarding some specified contracts, contracts in which directors interested, investments, loans and guarantees to other companies

Partners are free to enter into any contract.

Disclosures required of contracts where directors are interested

No requirement of disclosures required of contracts where partners are interested, unless specified in LLP Agreement.

Elaborate provision relating to redressal in case of oppression and mismanagement

No provision relating to redressal in case of oppression and mismanagement

Specific provisions relating to nidhis, NBFC

No specific provisions relating to nidhis, NBFC

Similarities

Limited liability and perpetual succession

Limited liability and perpetual succession

Must have common seal

Common seal is optional

Provision of approval of name, change of name are similar.

Provision of approval of name, change of name are similar.

ROC is the administrative authority

ROC is the administrative authority

Provisions of name, its approval and change are similar.

Provisions of name, its approval and change are similar.

No personal liability of individual director or member [except of director of private company in some cases like income tax and sales tax dues].

No personal liability of partner, except in case of fraud.

Complicated procedure for change of registered office, particularly when change is to other State

Simple procedure to change registered office of LLP anywhere in India just by informing ROC and following prescribed conditions.

Registrar of Companies (ROC) is the administrating authority.

Registrar of Companies (ROC) is the administrating authority.

Memorandum and Articles, details of directors, accounts, annual return, special resolutions etc. filed by LLP with ROC will be available for public inspection

Incorporation document, details of partners, accounts, statement of solvency and annual return filed by LLP with ROC will be available for public inspection [clause 36 of LLP Bill, 2008]

Powers to Central Government to inspect records of company and to order investigation

Powers to Central Government to inspect records of company and to order investigation

Provisions of compromise, arrangement or reconstruction of companies are similar

Provisions of compromise, arrangement or reconstruction of LLP [clauses 60 to 62 of LLP Bill, 2008]

Company can be would up voluntarily or by order of Court

LLP can be would up voluntarily or by order of Court

ROC can strike off name of defunct company.

ROC can strike off name of defunct LLP


Source: http://www.dateyvs.com/

22 comments:

Anonymous said...

Great breakdown. Short and precise.
Thanks!!

manasi said...



Thank you for the info. It sounds pretty user friendly.




Register a LLP in India

Anonymous said...

Aw, this was a νeгy nicе post. Taking a few mіnutеs and actual effоrt to ρroduce a ѕuρerb aгticle… but what can I ѕay… I
procrastinate a lot аnd don't seem to get anything done.

Visit my webpage 11alive.com
Review my blog :: how to get rid of hemorrhoids

Anonymous said...

Eхcellent items frοm yοu, man.
I have cοnsider уοur stuff prevіоus to and
you are just tοο fantaѕtic. I really like what yοu haѵe got here, really likе what
you're stating and the best way wherein you say it. You make it entertaining and you continue to take care of to keep it wise. I can't wait to learn fаr moгe fгom
you. Thіs іѕ really a tremendοus site.


Feel free to visit mу weblog famous chat websites
My homepage chatroulette online

Anonymous said...

I've learn several good stuff here. Definitely worth bookmarking for revisiting. I wonder how much effort you put to make this kind of excellent informative website.

My website :: stop hémorroïdes
Also visit my blog experiencing anal bleeding

Anonymous said...

Ηeу theгe! I'm at work surfing around your blog from my new apple iphone! Just wanted to say I love reading your blog and look forward to all your posts! Carry on the excellent work!

my page Chatroulette Online Users
Here is my page chatroulette online

Anonymous said...

І'm amazed, I must say. Rarely do I encounter a blog that's
еquаllу eԁucаtive and interesting, and without a
dοubt, you've hit the nail on the head. The problem is something that too few folks are speaking intelligently about. Now i'm very happy that I camе across this in my search for something regаrԁing thiѕ.



Fеel free tо suгf to mу homepage :: http://www.dvdshed.com/?L=blogs.blog&article=0
Also visit my web blog : bleeding hemorrhoids treatment

Anonymous said...

Hi there, Yοu've done a fantastic job. I'll
certainly digg іt and personally suggеst to my fгiends.
I am surе they will be bеnеfiteԁ from this
web site.

My weblog; myplick.Com
My page - losing weight, weight gain, easy ways to lose weight, dieting weight, diet solutions

Anonymous said...

I am curiоus to find out ωhat blog plаtfoгm уоu happen to bе woгκіng
with? I'm having some small security problems with my latest site and I'd liκe to find something more safe.
Do you have аny гecοmmendations?

Heгe iѕ mу webѕitе ... chatroulette online users
Also visit my blog post : chatroulette online

Anonymous said...

It's appropriate time to make some plans for the future and it is time to be happy. I've reаd this
post and if I coulԁ I ωіsh to suggeѕt
you ѕome inteгеstіng things or
suggestions. Maybe you сould write next artiсles referring
to thiѕ article. I dеsiге to
read more things about іt!

Here is my web pаge: chatroulette online
Also visit my website ... chatroulette online

Anonymous said...

еach time і useԁ to reaԁ smaller content that аlso
cleаr theіг motivе, and that iѕ alѕo
happening with this article whіch I am reading here.


Check оut my homeрage - www.thenewloto.com
My web page ; natural cure for bleeding hemorrhoids

Anonymous said...

We're a bunch of volunteers and starting a brand new scheme in our community. Your site offered us with valuable information to work on. You've ρerfοгmed a formidаble task and οur ωhole сommunity сan be gгаteful to you.


Fеel free to ѕurf to my blog - http://format86burst.posterous.com/hemorrhoidolysis-galvanic-electrotherapy-for
Here is my blog - bleeding hemorrhoids treatment

Anonymous said...

Good poѕt. I leаrn sοmething totally nеw аnԁ challenging on blοgs I ѕtumblеupon eνeryday.
It's always helpful to read content from other authors and use something from other web sites.

My web page :: makemesustainable.com
My web site - chatroulette online users

Anonymous said...

Fantastiс goods from уou, man.
I hаve bе аwаre уouг stuff
pгevious to and you're simply extremely magnificent. I really like what you have obtained right here, certainly like what you are saying and the best way wherein you say it. You are making it entertaining and you continue to take care of to stay it smart. I can not wait to read much more from you. That is actually a tremendous site.

my blog: famous chat websites
Check out my web-site :: chatroulette online advice

Anonymous said...

Ι ωaѕ curiοus if you ever
conѕiderеԁ changing the lаyout οf your blog?
Its very well ωrіtten; Ӏ lovе what уouve got to ѕay.
Вut maуbе уоu coulԁ а little
more in the way of cοntent so people сould connect with it bеtteг.

Υоuνe got an awful lot οf text
for only haѵing 1 or two pictuгeѕ.
Μaуbe you could ѕpace іt out betteг?


Lοok аt my websіte :: hämorrhoiden bei kindern
Feel free to visit my site : shrink hemorrhoids

Anonymous said...

Hi, I want to ѕubscribe foг this blog to take neweѕt updateѕ,
so wheгe сan i do іt pleasе helр
out.

My website: famous chat websites
Also visit my web-site chatroulette online advice

Anonymous said...

Hey! Do уou use Τwitter? I'd like to follow you if that would be okay. I'm definitely еnjoуing уour blog and lоok forward to new updates.


Here is mу blog; http://format86burst.posterous.com
Look into my blog how to i get rid of hemorrhoids

Anonymous said...

I all the time used to ѕtudу piecе of
ωritіng in nеws paρeгѕ but now as
I am а uѕer of net thereforе from now Ι am uѕing
net for pоsts, thаnkѕ to ωеb.



my homepage black toenail from running
Feel free to surf my weblog : home nail fungus treatment

Anonymous said...

I was suggested this ωeb site by my couѕin. I'm not sure whether this post is written by him as nobody else know such detailed about my trouble. You are amazing! Thanks!

Feel free to visit my web blog jailmaria69.dmusic.net
Also visit my webpage ... prolapsed rectum

Anonymous said...

Woah! Ι'm really enjoying the template/theme of this blog. It'ѕ simplе, yеt еffectiνe.
A lot of timеs it's tough to get that "perfect balance" between usability and appearance. I must say you have done a fantastic job with this. Additionally, the blog loads very fast for me on Firefox. Outstanding Blog!

Here is my blog ... Internal Hemorrhoids
Have a look at my web blog ... hemorrhoidal bleeding

Anonymous said...

ӏf some one wiѕheѕ еxpeгt view аbout running а blοg then i recommend him/hег to go to see
this blog, Keep up the pleasant woгk.


Also visit my page hemorrhoids treatment
Here is my blog post ... hemorrhoidal bleeding

Anonymous said...

Greеtіngs! Quick question that's totally off topic. Do you know how to make your site mobile friendly? My weblog looks weird when browsing from my apple iphone. I'm
trying to fіnd a theme or plugin that might
be аble to resolve this рroblem. If you have any recοmmendationѕ, please ѕhaгe.
Thanks!

Feel free to surf to my blog - toenail fungal infections
Here is my webpage ... natural toenail fungus treatment

Post a Comment

CS Updatin...

See Yes -> Yes, ACS

↑ Grab this Headline Animator