JMJA & Associates LLP Private & Confidential
For discussion purpose only
Distinctions between General Partnership, LLP and...
JMJA & Associates LLP Private & Confidential
For discussion purpose only
in the schedule / LLP
Agreement
of special resolu...
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Distinctions between general partnership llp company

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Basic difference between Partnership Firm, Company and LLP in India. To be used for general knowledge purpose only.

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Distinctions between general partnership llp company

  1. 1. JMJA & Associates LLP Private & Confidential For discussion purpose only Distinctions between General Partnership, LLP and Indian Company Sr. No. Feature General Partnership LLP Indian Company 1 Governing Law Partnerships are governed by Partnership Act, 1932 LLPs are governed and regulated under Limited Liability Partnership Act, 2008 Indian Companies are governed and regulated under Indian Companies Act, 2013 2 Number of Members Partnership formed by at least two partners and maximum partners could be 10 in case of banking business or 20 in case of other business activities LLP should have a minimum of 2 members. There is no limit on maximum number of members Private Company should have minimum 2 and maximum 200 members whereas Public Company should have minimum of 7 members 3 Charter Document Partnership Deed is the charter document entered and executed between partners The charter document for the LLP is LLP Agreement entered and executed between partners of LLP Memorandum of Association and Articles of Association are the charter documents of the Company 4 Name Name of the partnership does not suffixed by any specific words Name contains ‘Limited Liability Partnership’ or ‘LLP’ as suffix after the name Name contains ‘limited’ or ‘private limited’ as suffix, as the case may be, after the name 5 Statutory Compliances Normally no compliance is required under the Partnership Act, 1932 Designated partner shall look after statutory compliances otherwise all partners can look into affairs of the LLP. Board of Directors are responsible for statutory compliances to be complied by the Company 6 Resident Director / Designated Partner At least one of the Designated partner should be resident of India Directors of the Company need not be resident of India except one if all other directors are foreigner 7 Source of Finance LLP is flexible however, it cannot take capital contribution from the public at large Company is more flexible, it can raise the funds through various ways like, public offer, etc. 8 Variation in Charter Document Variation can be made only in accordance with the procedure laid down Variation can be made by the members in general meeting by way
  2. 2. JMJA & Associates LLP Private & Confidential For discussion purpose only in the schedule / LLP Agreement of special resolution passed 9 Legal Status A LLP on being incorporation acquires a legal status separate from its partners. A Company on its incorporation acquires a legal status separate from its members. 10 Extent of Liability The liability of the partners in a LLP is limited to the extent of their capital contribution. The LLP property is liable for the debts of the partnership except in case of fraud committed by a partner in which case his personal property becomes liable. The liability of a shareholder of a limited Company is limited to the extent of unpaid share by a shareholder 11 Management The partners of the LLP as per the LLP agreement are responsible for the management. The designated partners are responsible for the business activities as well as compliance with the LLP Act and other applicable laws. The Board of Directors are responsible for management of the Company including compliance with the corporate laws.

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