The Limited Liability Partnership (LLP) is an incorporated business organization, which possesses elements of both a Partnership Firm and a Limited Company. In limited liability partnership, some of its partners have limited liability like shareholders to a corporation. However, in some countries, there is at least one partner with unlimited liability. Again, the designated partners to LLP have the right to manage their internal and external business affairs directly, in accordance with the LLP Agreement. Its every partner has its own responsibilities and liabilities, and one is not responsible or liable for any misconduct, negligence, or delinquency of other partners to LLP.
Limited Liability Partnerships (LLP)Consulting Services
DIFFERENCE BETWEEN LLP, COMPANY AND PARTNERSHIP
| Company | Parnership Firm | LLP | |
| REGISTRATION | Compulsory registration required with the ROC. Certificate of Incorporation is conclusive evidence. | Not compulsory. Unregistered Partnership Firm will not have the ability to sue. | Compulsory registration required with the ROC |
| NAME | Name of a public company to end with the word “limited” and a private company with the words “private limited” | No guidelines. | Name to end with “LLP”” Limited Liability Partnership” |
| CAPITAL CONTRIBUTION | Private company should have a minimum paid up capital of Rs. 1 lakh and Rs.5 lakhs for a public company | Not specified | Not specified |
| LEGAL ENTITY STATUS | is a separate legal entity | Not a separate legal entity | is a separate legal entity |
| LIABILITY | Limited to the extent of unpaid capital. | Unlimited, can extend to the personal assets of the partners | Limited to the extent of the contribution to the LLP. |
| NO. OF SHAREHOLDERS / PARTNERS | Minimum of 2. In a private company, maximum of 50 shareholders | 2-20 partners | Minimum of 2. No Maximum |
| FOREIGN NATIONAL AS SHAREHOLDER / PARTNER | Foreign nationals can be shareholders | Foreign nationals can not form partnership | Foreign nationals can be partners |
| TAXABILITY | The income is taxed at 30% + surcharges+cess | The income is taxed at 30% + surcharges+cess | Not yet notified |
| MEETINGS | Quarterly Board of Directors meeting, annual sharholding meeting is mandatory | Not Required | Not Required |
| ANNUAL RETURN | Annual Accounts and Annual Return to Filed with ROC | No Returns to be filed with Registrar of Firms | Annual statement of accounts and solvency & Annual Return has to be filed with ROC |
| AUDIT | Compulsory, irrespective of share capital and turnover | Compulsory | Required, if the contribution is above Rs. 25 lakhs or if annual turnover is above Rs. 40 lakhs |
| HOW DO THE BANKERS VIEW | High credtiworthiness, due to stringent compliances and disclosures required | Credtiworthiness depends on goodwill and credit worthiness of the partners | Perception is higher compared to that of a partnership but lesser than a company |
| DISSOLUTION | Very procedural. Voluntary of by order of National Company Law Tribunal | By agreement of the partners, insolvency or by Court Order | Less procedural compared to company. Voluntary of by order of National Company Law Tribunal |
| WHISTLE BLOWING | No such provision | No such provision | Protection provided to employees and patners who provide useful information during the investigation process. |
What A R P A N & Associates LLP Offers
We offer LLP Consulting / Advisory services which are highly renowned as a one-window-solution provider for LLP Consulting services in Delhi/NCR. We offer professional assistance in getting your LLP Consulting services at competitive rates and in a short span of time. We offer following LLP Services:
- Name Reservation Service
- LLP Agreement Drafting Service
- Annual Filing Services
- Induction of New Partners and changes thereof
- Companies offers following LLP Services as well.
- Conversion of Firms / Companies to LLP
- Conversion of LLP to Company (under Part IX of the Companies Act,1956 )
- Compromise, Arrangement or Reconstruction of Limited Liability Partnerships