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October 30, 2009 Copyright Dipak Parmar Meant for educational purpose only 1 Company Act, Company Act, Partnership Act and Partnership Act and Limited Liability Limited Liability Partnership (LLP) Partnership (LLP) Dipak G. Parmar Dipak G. Parmar  Advocate  Advocate B. Com., LL. M. , C. S. (Int er), Adv. Dip . in Cy ber Law B. Com., LL. M. , C. S. (Int er), Adv. Dip . in Cy ber Law

Company Partnership and LLP Ver 2.0

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October 30, 2009Copyright Dipak Parmar

Meant for educational purpose only 1

Company Act,Company Act,

Partnership Act andPartnership Act andLimited LiabilityLimited Liability

Partnership (LLP)Partnership (LLP)

Dipak G. ParmarDipak G. Parmar Advocate Advocate

B. Com., LL. M. , C. S. (Inter), Adv. Dip. in Cyber LawB. Com., LL. M. , C. S. (Inter), Adv. Dip. in Cyber Law

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Meaning of CompanyMeaning of Company

A  company is a A  company is a voluntary voluntary association of association of individuals formed for some commonindividuals formed for some common

purpose. (Smith v/s A 

nderson)purpose. (Smith v/s A 

nderson) with capital divisible into parts, known aswith capital divisible into parts, known as

shares and with limited liabilityshares and with limited liability

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 ARTIFICIAL PERSON ARTIFICIAL PERSON

Company is an artificial personCompany is an artificial person   it has no body,it has no body,no soul and no conscience. These physicalno soul and no conscience. These physicaldisabilities make a company an artificial person.disabilities make a company an artificial person.

But like any other natural person, it can ownBut like any other natural person, it can ownand transfer property, can employ people, canand transfer property, can employ people, canenter into contracts, can sure and be sued in itsenter into contracts, can sure and be sued in itsown name. Even if a person holds all its shares,own name. Even if a person holds all its shares,a company would be considered as a separatea company would be considered as a separatelegal corporate body.legal corporate body.

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CH ARACTERISTICS OF  A COMP ANYCH ARACTERISTICS OF  A COMP ANY

Separate Legal EntitySeparate Legal Entity

On registration under the Companies  A ct, aOn registration under the Companies  A ct, acompany gets a separate personality of its own.company gets a separate personality of its own.

In the eye of law, it is a person different fromIn the eye of law, it is a person different fromthe members composing it.the members composing it.

Solomon V/s Solomon & Co. LimitedSolomon V/s Solomon & Co. Limited

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CH ARACTERISTICS OF  A COMP ANYCH ARACTERISTICS OF  A COMP ANY

Separate Legal EntitySeparate Legal Entity

Is Solomon & Co Limited is an entirely different fromIs Solomon & Co Limited is an entirely different fromSolomon even if holds practically all shares in theSolomon even if holds practically all shares in thecompany?company?

 Yes Yes

Is Solomon has insurable interest in the property of Is Solomon has insurable interest in the property of Solomon & Co LimitedSolomon & Co Limited

NoNo

If Solomon dies, whether Solomon & Co Limited willIf Solomon dies, whether Solomon & Co Limited willcontinue to exist?continue to exist?

 Yes Yes

Is Nationality of Solomon & Co Limited depend on theIs Nationality of Solomon & Co Limited depend on thenationality of the Solomon?nationality of the Solomon?

NoNoOctober 30, 2009

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CH ARACTERISTICS OF  A COMP ANYCH ARACTERISTICS OF  A COMP ANY

Limited LiabilityLimited Liability

Liability of the shareholders of a company is not Liability of the shareholders of a company is not unlimited.unlimited.

Limited by SharesLimited by Shares

It is limited to the extent of unpaid value of theIt is limited to the extent of unpaid value of theshares subscribed by them.shares subscribed by them.

For example, if a person has paid Rs. 5 on a share of For example, if a person has paid Rs. 5 on a share of Rs. 10, his liability extends up to a further sum of Rs.Rs. 10, his liability extends up to a further sum of Rs.5/5/-- only.only.

Limited by GuaranteeLimited by Guarantee It is limited to the extent of amount of guarantee.It is limited to the extent of amount of guarantee.

Under no circumstances can a shareholder be asked toUnder no circumstances can a shareholder be asked topay the loans of the company.pay the loans of the company.

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CH ARACTERISTICS OF  A COMP ANYCH ARACTERISTICS OF  A COMP ANY

Perpetual ExistencePerpetual Existence A  company has the distinct characteristic of  A  company has the distinct characteristic of 

having perpetual existence.having perpetual existence.

Its existence is not affected by the death,Its existence is not affected by the death,insolvency or retirement of its membersinsolvency or retirement of its members(shareholders) or directors.(shareholders) or directors.

It is created by a process of law and can be put It is created by a process of law and can be put 

an end by process of law

.an end by process of law

. Members may come and go but the companyMembers may come and go but the company

can go on for ever (until dissolved).can go on for ever (until dissolved).

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CH ARACTERISTICS OF  A COMP ANYCH ARACTERISTICS OF  A COMP ANY

Perpetual ExistencePerpetual Existence During the war all members of a privateDuring the war all members of a private

company, while in general meeting , werecompany, while in general meeting , were

killed by a bomb.killed by a bomb. Is company survived after demise of all itsIs company survived after demise of all its

members?members?

 Yes..Not even a hydrogen bomb could Yes..Not even a hydrogen bomb couldhave destroyed it (K/9 Meat Supplieshave destroyed it (K/9 Meat Supplies(Guildford) Ltd Re)(Guildford) Ltd Re)

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CH ARACTERISTICS OF  A COMP ANYCH ARACTERISTICS OF  A COMP ANY

Common SealCommon Seal

A  company has a common seal which is substitute for its A  company has a common seal which is substitute for itssignature as a company.signature as a company.

Being an artificial person, it can not sign documents byBeing an artificial person, it can not sign documents by

itself.itself. The name of the company is engraved on the commonThe name of the company is engraved on the common

seal.seal.

The common seal is kept in safe custody by theThe common seal is kept in safe custody by the

secretary of the company, it is used accordingly to thesecretary of the company, it is used accordingly to thedirections of the Board of Directors.directions of the Board of Directors.

When this seal is affixed for the company on anyWhen this seal is affixed for the company on anydocument, it has to be witnessed by at least t wodocument, it has to be witnessed by at least t wodirectors.directors.

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CH ARACTERISTICS OF  A COMP ANYCH ARACTERISTICS OF  A COMP ANY

Separation of Ownership from ManagementSeparation of Ownership from Management

We know that the entity of a company is quiteWe know that the entity of a company is quitedistinct from that of the members ordistinct from that of the members orshareholders who compose it, a shareholdershareholders who compose it, a shareholder

cannot bind the company for his acts.cannot bind the company for his acts. A ll the shareholders do not manage the A ll the shareholders do not manage the

company themselves but they leave thecompany themselves but they leave themanagement into the hands of theirmanagement into the hands of theirrepresentative and trustees,representative and trustees, i.ei.e,. the Board of ,. the Board of Directors.Directors.

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CH ARACTERISTICS OF  A COMP ANYCH ARACTERISTICS OF  A COMP ANY

Separate PropertySeparate Property

A ll the property of the company vests in it. The A ll the property of the company vests in it. Thecompany can control, manage and hold the same incompany can control, manage and hold the same inits own name.its own name.

The members have no ownership rights in theThe members have no ownership rights in thecompany's property, either individually orcompany's property, either individually orcollectively.collectively.

A  shareholder does not even have an insurable right  A  shareholder does not even have an insurable right 

in the property of the company.in the property of the company. The creditors of the company can have a claim onlyThe creditors of the company can have a claim only

against the property of the company and not against against the property of the company and not against 

the property of the individual members.the property of the individual members.

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CH ARACTERISTICS OF  A COMP ANYCH ARACTERISTICS OF  A COMP ANY

Transferability of SharesTransferability of Shares

The capital of a company is divided intoThe capital of a company is divided intoshares of small denominations which areshares of small denominations which arereadily transferable from one owner toreadily transferable from one owner toanother without much formality.another without much formality.

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CH ARACTERISTICS OF  A COMP ANYCH ARACTERISTICS OF  A COMP ANY

Capacity to SueCapacity to Sue

A  company can sue and be sued in its A  company can sue and be sued in itscorporate namecorporate name

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FORM ATION OF  A COMP ANYFORM ATION OF  A COMP ANY For getting a company incorporated, the following documents haveFor getting a company incorporated, the following documents have

to be prepared and filed with the Registrar of Joint Stockto be prepared and filed with the Registrar of Joint StockCompanies:Companies:

Memorandum of  A ssociationMemorandum of  A ssociation

A rticle of  A ssociation A rticle of  A ssociation

Written Consent of DirectorsWritten Consent of Directors

A ddress of the registered office of the Company A ddress of the registered office of the Company

A  statutory declaration by the secretary or the solicitor or a A  statutory declaration by the secretary or the solicitor or aChartered  A ccountant or any other person who has taken part inChartered  A ccountant or any other person who has taken part inthe formation of the company to the effect what all provisions of the formation of the company to the effect what all provisions of 

the companies  A ct with regard to registration have beenthe companies  A ct with regard to registration have beencomplied with.complied with.

A ll the above documents must be accompanied with requisite filing A ll the above documents must be accompanied with requisite filingfees, stamp duty (to be affixed on Memorandum and  A rticle of fees, stamp duty (to be affixed on Memorandum and  A rticle of  A ssociation) and registration fees at the prescribed rates. A ssociation) and registration fees at the prescribed rates.

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FORM ATION OF  A COMP ANYFORM ATION OF  A COMP ANY

The Registrar will scrutinize these documents. If he isThe Registrar will scrutinize these documents. If he issatisfied, he will enter the name of the company in thesatisfied, he will enter the name of the company in theregister maintained by him and will issue a certificate of register maintained by him and will issue a certificate of incorporation.incorporation.

The certificate of incorporation is a conclusive proof of The certificate of incorporation is a conclusive proof of the fact that the company was duly incorporated. Onthe fact that the company was duly incorporated. Onobtaining this certificate, the company acquires anobtaining this certificate, the company acquires anindependent entity and is able to sue and be sued in itsindependent entity and is able to sue and be sued in its

own name. It comes to be recognized as a company dulyown name. It comes to be recognized as a company dulyregistered under the Companies  A ct and authorized toregistered under the Companies  A ct and authorized toact as such.act as such.

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Memorandum of  AssociationMemorandum of  Association

(Wh

at)(Wh

at) The Memorandum of  A ssociation to which at The Memorandum of  A ssociation to which at 

least seven persons have subscribed theirleast seven persons have subscribed theirnames, each one of them having promised tonames, each one of them having promised to

take at least one share. It should be properlytake at least one share. It should be properlystamped. In case of private companies thestamped. In case of private companies thenumber of persons required to subscribe theirnumber of persons required to subscribe theirnames is only t wo. If t wo persons or more agreenames is only t wo. If t wo persons or more agree

to take only one share, they will be treated asto take only one share, they will be treated asone person only for this purpose.one person only for this purpose.

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Memorandum of  AssociationMemorandum of  Association

It is a well established rule that a company can doIt is a well established rule that a company can doonly those acts as are permitted by the objectsonly those acts as are permitted by the objectsclause.clause.

If the contract which a person enters into with theIf the contract which a person enters into with thecompany is beyond the powers of the company ascompany is beyond the powers of the company asdefined in the objects clause of the Memorandum,defined in the objects clause of the Memorandum,such contract will not been force able against thesuch contract will not been force able against thecompany.company.

Therefore, all those who want to deal with aTherefore, all those who want to deal with acompany should make it a points to study thecompany should make it a points to study theMemorandum of  A ssociation.Memorandum of  A ssociation.

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 Articles of  Association Articles of  Association

(How)(How) The  A rticles of  A ssociation should beThe  A rticles of  A ssociation should be

similarly singed.  A public company,similarly singed.  A public company,however, may not prepare special  A rticleshowever, may not prepare special  A rticlesof its own. If it does not, it will b deemedof its own. If it does not, it will b deemedto have adopted the Model  A rticles givento have adopted the Model  A rticles givenin Table  A of the companies  A ct.in Table  A of the companies  A ct.

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TYPES OF COMP ANIESTYPES OF COMP ANIESFrom the point of view of IncorporationFrom the point of view of Incorporation

Statutory CompaniesStatutory Companies

Created by a special  A ct of the LegislatureCreated by a special  A ct of the Legislature

Example: RBI, UTI, SBI etc.Example: RBI, UTI, SBI etc. Registered CompaniesRegistered Companies

Formed and registered under the CompaniesFormed and registered under the Companies A ct  A ct 

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TYPES OF COMP ANIESTYPES OF COMP ANIESFrom the point of view of liabilityFrom the point of view of liability

Companies with limited liabilityCompanies with limited liability

By sharesBy shares

By guaranteeBy guarantee Companies with unlimited liabilityCompanies with unlimited liability

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TYPES OF COMP ANIESTYPES OF COMP ANIESOn the basis of numbers of membersOn the basis of numbers of members

Private c ompanyPrivate c ompany

has a minimum paidhas a minimum paid--up share capital of Rs.1up share capital of Rs.1 LakhLakh or suchor suchhigher capital as may be prescribed; andhigher capital as may be prescribed; and

which by its articleswhich by its articles--

restricts the right to transfer its sharesrestricts the right to transfer its shares

limits the number of its members to 50, excluding thoselimits the number of its members to 50, excluding thosewho are its employees or were its employees formerly,who are its employees or were its employees formerly,

prohibits an invitation to the public for subscription to itsprohibits an invitation to the public for subscription to its

share and debentures, andshare and debentures, and prohibits an invitation or acceptance of deposits fromprohibits an invitation or acceptance of deposits from

persons other than its members, directors or their relativespersons other than its members, directors or their relatives

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TYPES OF COMP ANIESTYPES OF COMP ANIESOn the basis of numbers of membersOn the basis of numbers of members

Public c ompanyPublic c ompany

is not a private company;is not a private company;

has a minimum paidhas a minimum paid--up capital of Rs. 5up capital of Rs. 5lakhslakhs or such higher capital as may beor such higher capital as may beprescribed;prescribed;

is a private company but subsidiary of ais a private company but subsidiary of apublic company.public company.

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PartnershipPartnership

Partnership is one of the special types of Partnership is one of the special types of Contract. Initially, this was part of IndianContract. Initially, this was part of IndianContract  A ct itself (Chapter IX Contract  A ct itself (Chapter IX -- sections 239sections 239

to 266), but later converted into separate A 

ct to 266), but later converted into separate A 

ct in 1932, namely, the Indian Partnership.in 1932, namely, the Indian Partnership.

The Indian Partnership  A ct is complimentaryThe Indian Partnership  A ct is complimentaryto Contract  A ct. Basic provisions of Contract to Contract  A ct. Basic provisions of Contract 

 A ct apply to contract of partnership also. A ct apply to contract of partnership also.

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UNLIMITED LIABILITY IS UNLIMITED LIABILITY IS 

M AJOR

DISA

DV ANTAG

EM AJOR

DISA

DV ANTAG

E The major disadvantage of partnership is theThe major disadvantage of partnership is the

unlimited liability of partners for the debtsunlimited liability of partners for the debtsand liabilities of the firm.and liabilities of the firm.

A ny partner can bind the firm and the firm is A ny partner can bind the firm and the firm isliable for all liabilities incurred by any Partnerliable for all liabilities incurred by any Partneron behalf of the firm.on behalf of the firm.

If property of partnership firm is insufficient If property of partnership firm is insufficient to meet liabilities, personal property of anyto meet liabilities, personal property of anypartner can be attached to pay the debts of partner can be attached to pay the debts of the firm.the firm.

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P ARTNERSHIP FIRM IS NOT  A P ARTNERSHIP FIRM IS NOT  A 

LEGAL

ENTITYL

EGAL

ENTITY

It may be surprising but true that a PartnershipIt may be surprising but true that a PartnershipFirm is not a legal entity. It has limited identityFirm is not a legal entity. It has limited identityfor purpose of tax law.for purpose of tax law.

Under partnership law, a partnership firm is not Under partnership law, a partnership firm is not a legal entity, but only consists of individuala legal entity, but only consists of individualpartners for the time being. It is not a distinct partners for the time being. It is not a distinct legal entity apart from the partners constitutinglegal entity apart from the partners constituting

it it -- Malabar Fisheries Co.Malabar Fisheries Co. v.v. CITCIT (1979) 120 ITR(1979) 120 ITR49 = 2 Taxman 409 (SC).49 = 2 Taxman 409 (SC).

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Partnership, Partner, Firm andPartnership, Partner, Firm and

Firm NameFirm Name

Partnership is the relation bet ween persons Partnership is the relation bet ween personswho havewho have agreed agreed to share the profits of to share the profits of businessbusiness carried on bycarried on by all or any to all or any to 

themthem acting for all.acting for all.

Persons who have entered into partnershipPersons who have entered into partnershipwith one another are called individuallywith one another are called individually

 partners and collectively  a firm, and the partners and collectively  a firm, and thename under which their business is carriedname under which their business is carriedon is called the  firm name. (S. 4)on is called the  firm name. (S. 4)

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P ARTNERS  ARE MUTU AL  AGENTSP ARTNERS  ARE MUTU AL  AGENTS

The business of firm can be carried on byThe business of firm can be carried on byall or any of them for all.all or any of them for all.

A ny partner has authority to bind the firm.

 A ny partner has authority to bind the firm.

 A ct of any one partner is binding on all the A ct of any one partner is binding on all thepartners.partners.

Thus, each partner is agent of all theThus, each partner is agent of all theremaining partners.remaining partners.

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ORAL OR WRITTEN  AGREEMENTORAL OR WRITTEN  AGREEMENT

A  partnership agreement can be either oral or A  partnership agreement can be either oral orwritten.written.

A greement in writing is necessary to get the firm A greement in writing is necessary to get the firmregistered or to assessed as partnership firm registered or to assessed as partnership firm under Income Tax  A ct.under Income Tax  A ct.

A  written agreement is advisable to establish A  written agreement is advisable to establishexistence of partnership and to prove rights andexistence of partnership and to prove rights and

liabilities of each partner, as it is difficult toliabilities of each partner, as it is difficult toprove an oral agreement.prove an oral agreement.

However, written agreement is not essentialHowever, written agreement is not essentialunder Indian Partnership  A ct.under Indian Partnership  A ct.

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SH ARING OF PROFIT NECESSARYSH ARING OF PROFIT NECESSARY

The partners must come together to shareThe partners must come together to shareprofits.profits.

Thus, if one member gets only fixedThus, if one member gets only fixedremuneration (irrespective of profits) or one whoremuneration (irrespective of profits) or one whogets only interest and no profit share at all, isgets only interest and no profit share at all, isnot a partner.not a partner.

Similarly, sharing of receipts or collectionsSimilarly, sharing of receipts or collections

(without any relation to profits earned) is not (without any relation to profits earned) is not  sharing of profit and the association is not  sharing of profit and the association is not  partnership. partnership.

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SH ARING OF PROFIT NECESSARYSH ARING OF PROFIT NECESSARY

For example, agreement to share rents collectedFor example, agreement to share rents collectedor percentage of tickets sold is not partnership,or percentage of tickets sold is not partnership,as sharing of profits is not involved.as sharing of profits is not involved.

The share need not be in proportion to fundsThe share need not be in proportion to fundscontributed by each partner.contributed by each partner.

Interestingly, though sharing of profit isInterestingly, though sharing of profit isessential, sharing of losses is not an essentialessential, sharing of losses is not an essential

condition for partnership .condition for partnership . Similarly, contribution of capital is not essentialSimilarly, contribution of capital is not essential

to become partner of a firm.to become partner of a firm.

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NUMBER OF P ARTNERSNUMBER OF P ARTNERS

Since partnership is agreement thereSince partnership is agreement theremust be minimum t wo partners.must be minimum t wo partners.

Section 11 of Companies A 

ct prohibitsSection 11 of Companies A 

ct prohibitspartnership consisting of more than 20partnership consisting of more than 20members, unless it is registered as amembers, unless it is registered as acompany or formed in pursuance of somecompany or formed in pursuance of some

other law.other law.

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The Property of the FirmThe Property of the Firm Subject to contract bet ween the partners, theSubject to contract bet ween the partners, the

property of the firm includes all property and rightsproperty of the firm includes all property and rightsand interests in property originally brought into theand interests in property originally brought into thestock of the firm, or acquired, by purchase orstock of the firm, or acquired, by purchase or

otherwise, by or for the firm, or for the purposesotherwise, by or for the firm, or for the purposesand in the course of the business of the firm, andand in the course of the business of the firm, andincludes also the goodwill of the business.includes also the goodwill of the business.

Unless the contrary intention appears, property andUnless the contrary intention appears, property and

rights and interests in property acquired with moneyrights and interests in property acquired with moneybelonging to the firm are deemed to have beenbelonging to the firm are deemed to have beenacquired for the firm [section 14].acquired for the firm [section 14].

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Registration of FirmsRegistration of Firms Registration of firm is not compulsory,Registration of firm is not compulsory, thoughthough

usually done as registration brings manyusually done as registration brings manyadvantages to the firm.advantages to the firm.

No suit shall be instituted in any court by or onNo suit shall be instituted in any court by or onbehalf of any person suing as a partner in a firmbehalf of any person suing as a partner in a firmagainst the firm or any person alleged to be oragainst the firm or any person alleged to be orto have been a partner in the firm unless theto have been a partner in the firm unless the

firm is registered [S. 69(1)]firm is registered [S. 69(1)] If a firm is unregistered, a partner cannot sueIf a firm is unregistered, a partner cannot sue

the firm or any other partner nor the firm canthe firm or any other partner nor the firm cansue third party.sue third party.

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OVERVIEW OF LLPOVERVIEW OF LLP

Two forms of businessTwo forms of business organisationorganisation are popularare popular   PartnershipPartnershipand company.and company.

Partnership provides flexibility of operations. However, itsPartnership provides flexibility of operations. However, itsbasic disadvantage is unlimited liability and act of partnerbasic disadvantage is unlimited liability and act of partner

binds partnership firm which in turn binds other partners also.binds partnership firm which in turn binds other partners also.

Companies  A ct does remove defect of unlimited liability but Companies  A ct does remove defect of unlimited liability but there are many restrictions on managerial remuneration,there are many restrictions on managerial remuneration,loans, investments, guarantees, selling agents, contractsloans, investments, guarantees, selling agents, contractswhere directors are related etc. Many procedural formalitieswhere directors are related etc. Many procedural formalitieslike registration of charge, periodic meetings and filing of like registration of charge, periodic meetings and filing of numerous documents with ROC is required. Many statutorynumerous documents with ROC is required. Many statutoryregisters and records are to be maintained.registers and records are to be maintained.

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LLP IS IDE AL BLEND OF LLP IS IDE AL BLEND OF 

P ARTNERSHIP  AND COMP ANYP ARTNERSHIP  AND COMP ANY

 You mix Companies  A ct and Indian Partnership  A ct, You mix Companies  A ct and Indian Partnership  A ct,remove all defects of traditional partnership firm, removeremove all defects of traditional partnership firm, removeall procedural hassles and rigidity in Companies  A ct,all procedural hassles and rigidity in Companies  A ct,keep good points of both Indian Partnership  A ct andkeep good points of both Indian Partnership  A ct andCompanies  A ct and what you have is Limited LiabilityCompanies  A ct and what you have is Limited LiabilityPartnershipPartnership

LLP is a very good substitute to formation of a privateLLP is a very good substitute to formation of a privatelimited company.limited company.

LLP may not be a good substitute for small family ownedLLP may not be a good substitute for small family ownedpartnerships, but will be excellent tool for professionalpartnerships, but will be excellent tool for professionalpartnerships.partnerships.

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BASIC FE ATURES OF LLPBASIC FE ATURES OF LLP

Limited liability and perpetual succession Limited liability and perpetual succession -- LLP is aLLP is abody corporate having perpetual succession [Sectionbody corporate having perpetual succession [Section3(1) of LLP  A ct, 2008]. It is a legal entity separate from3(1) of LLP  A ct, 2008]. It is a legal entity separate fromits partners. [S. 3(2)]its partners. [S. 3(2)]

A ny change in the partners of a LLP shall not affect the A ny change in the partners of a LLP shall not affect theexistence, rights or liabilities of the limited liabilityexistence, rights or liabilities of the limited liabilitypartnershippartnership

No partner is personally liable to liabilities of LLP except No partner is personally liable to liabilities of LLP except 

in case of fraud . [Ss. 27 and 28] Liability of LLP is not in case of fraud . [Ss. 27 and 28] Liability of LLP is not liability of individual partners.liability of individual partners.

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BASIC FE ATURES OF LLPBASIC FE ATURES OF LLP

Partner is agent of LLP but not of other partnersPartner is agent of LLP but not of other partners --Thus, he can bind LLP by his acts but not other partners.Thus, he can bind LLP by his acts but not other partners.

Flexibility in operations of LLPFlexibility in operations of LLP -- The LLP  A ct The LLP  A ct 

provides great flexibility in management and operationsprovides great flexibility in management and operationsof LLP. In many of the cases, provision as contained inof LLP. In many of the cases, provision as contained inLLP  A greement prevails.LLP  A greement prevails.

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BASIC FE ATURES OF LLPBASIC FE ATURES OF LLP

Accounts and annual returns Accounts and annual returns -- EachEachLLP will have to maintain accounts. It willLLP will have to maintain accounts. It willhave to prepare Statement of  A ccount andhave to prepare Statement of  A ccount andSolvency. This statement and  A nnualSolvency. This statement and  A nnualReturn is required to be filed withReturn is required to be filed withRegistrar of Companies. LLP havingRegistrar of Companies. LLP having

turnover/contribution beyond prescribedturnover/contribution beyond prescribedlimits will have to get their accountslimits will have to get their accountsaudited by Chartered  A ccountant.audited by Chartered  A ccountant.

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ReferenceReference

http://www.folkdiaries.com/2009/01/meaninghttp://www.folkdiaries.com/2009/01/meaning--of of--companycompany--andand--itsits--salient salient--features/features/

http://www.freemba.in/articlesread.php?artcode=47&stcode=8&subhttp://www.freemba.in/articlesread.php?artcode=47&stcode=8&substcode=4stcode=4

http://www.freemba.in/articlesread.php?artcode=52&stcode=8&subhttp://www.freemba.in/articlesread.php?artcode=52&stcode=8&substcode=4stcode=4

http://www.freemba.in/articlesread.php?artcode=56&substcode=4&http://www.freemba.in/articlesread.php?artcode=56&substcode=4&stcode=8stcode=8

http://www.dateyvs.com/llp.htmhttp://www.dateyvs.com/llp.htm

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Thank YouThank You

DIP AK G. P ARMARDIP AK G. P ARMAR

Email: [email protected][email protected]