Limited liability partnership
LLP is an alternative form of company that offers the benefits of limited liability and partnership flexibility. LLP can continue regardless of changes in shareholders. It has business and legal capabilities in its own name. LLP is an independent legal entity, responsible for all of its assets and shareholder liability is limited to the agreed contribution to LLP. In addition, because partners are not responsible for the independent or unauthorized conduct of other partners, individual partners are protected from joint and several liability due to incorrect business decisions or misconduct by another partner. Will be done. The mutual rights and obligations of partners within an LLP are defined as follows: Agreement between partners or between partners and LLPs. However, LLP is not relieved of liability for other obligations as an independent entity. LLP is called a hybrid of enterprise and partnership because it contains both “corporate structure” and “partnership structure” elements.
LLP is considered as small llp if following conditions are met:
|Contribution from partners||Less than equal to Rs.5 crores|
|Turnover||Preceding financial year upto Rs.50 crores|
A company is a separate legal entity formed by group of individuals with a motive of earning profit. It has a feature of perpetual succession which means that members may come and go but company may go on forever. The business domain of a company depends on its structure, from partnerships to sole proprietors to companies. Companies are either public or private.
|Public Company||Private Company|
|Issues equity to shareholders on an exchange||Equity maybe issued but are not traded on an exchange|
|Furnish financial information publicly to disclose the financial position of the company||Do not have to furnish financial information to the public|
A branch is a branch established by a parent company to do similar business in different parts of India. As a branch office in India (“BO”), foreign companies can do full business in India. BOs may engage in the same or essentially the same trading activities as their parent or affiliate. However, BO is allowed to outsource these services to Indian manufacturers, but not to carry out manufacturing activities directly.
Following are the requirements for establishing a branch office:
Net Worth: More than equal to $100,000
Profit Track Record: Immediately preceding 5 years
|Limited Liability Company||Company||Branch Office|
Minimum : 2
Maximum : No Limit
Minimum : 2
Maximum : 200
|Statutory audit is mandatory if sales do not exceed 40 larks or your contribution does not exceed 25 larks in any fiscal year||Statutory Audit is mandatory||Statutory Audit is mandatory|
|Annual accounts and Annual returns to be filed with ROC. These returns are filed in LLP Form 8 and Form 11||Annual statement of accounts & annual return with ROC. These are filed in form AOC 4 and MGT 7||Annual statement of accounts & annual return with ROC. These are filed in Form FC 3 and Form FC 4|
|Shares can be transferred only by executing agreement with notary public||Shares can be transferred easily||NA|
We assist our clients with registration/ incorporation of LLP, annual compliance with LLPs, setting up their business in India, and compliance related to company incorporation, ROC compliance, company winding up, etc. If you have any questions or would like to know more about the LLP, small LLP, company and branch office, kindly contact us.