|
Category
|
Company
|
LLP
|
|
Prevailing Law
|
Companies are prevailed by Companies
Act, 1956 |
Limited Liability Partnership are
prevailed by ‘The Limited Liability Partnership Act, 2008 and various Rules made there under |
|
Registration
|
Registration with Registrar of
Companies required. |
Registration with Registrar of LLP
required. |
|
Creation
|
Created by Law
|
Created by Law
|
|
Distinct entity
|
Is a separate legal entity under the
Companies Act, 1956. |
Is a separate legal entity under the
Limited Liability Partnership Act, 2008. |
|
Name of Entity
|
Name to contain ‘Limited’ in case of
Public Company or ‘Private Limited’ in case of Private Company as suffix. |
Name to contain ‘Limited Liability
Partnership’ or ‘LLP’ as suffix. |
|
Cost of Formation
|
Cost of formation is higher in
comparison to LLP |
comparatively much lesser than the
cost of formation of Company |
|
Perpetual Succession
|
It has perpetual succession and
members may come and go. |
It has perpetual succession and
partners may come and go |
|
Charter Document
|
Memorandum and Article of Association
is the charter of the company which defines its scope of operation. |
LLP Agreement is a charter of the LLP
which denotes its scope of operation and rights and duties of the partners vis-à-vis LLP. |
|
Formalities of Incorporation
|
Various eforms along the Memorandum
& Articles of Association are filled with Registrar of Companies with prescribed fees |
Various eForms and the LLP Agreement
are filed with the Registrar of LLP along with the prescribed Fee. |
|
Time line
|
It will take 15 days (approx.) to
incorporate (inclusive of time taken to obtain DIN) |
It will take 10 days (approx.) to
incorporate (inclusive of time taken to obtain DPN) |
|
Number of Members
|
2 to 50 members in case of Private
Company and Minimum 7 members in case of Public Company. |
Minimum 2 partners and their is no
limitation of maximum number of partners. |
|
Liability of Partners/Members
|
Generally limited to the amount
required to be paid up on each share. |
Limited, to the extent their
contribution towards LLP, except in case of intentional fraud or wrongful act of omission or commission by the partner. |
|
Tax Liability
|
Income of Company is Taxed at a Flat
rate of 30% Plus surcharge as applicable. |
Income of LLP is taxed at a Flat rate
of 30% plus education cess as applicable. |
|
Principal/Agent Relationship
|
The directors act as agents of the
company and not of the members |
Partners act as agents of LLP and not
of the other partners. |
|
Transfer / Inheritance of Rights
|
Ownership is easily transferable.
|
Regulations relating to transfer are
governed by the LLP Agreement . |
|
Transfer of Share / Partnership
rights in case of death |
In case of death of member, shares
are transmitted to the legal heirs. |
In case of death of a partner, the
legal heirs have the right to get the refund of the capital contribution + share in accumulated profits, if any. Legal heirs will not become partners |
|
Admission as partner / member
|
A person can become member by buying
shares of a company. |
A person can be admitted as a partner
as per the LLP Agreement |
|
Cessation as partner / member
|
A member / shareholder can cease to
be a member by selling his shares. |
A person can cease to be a partner as
per the LLP Agreement or in absence of the same by giving 30 days prior notice to the LLP. |
|
Requirement of Managerial Personnel
for day to day administration |
Directors are appointed to manage the
business and other statutory compliances on behalf of the members. |
Designated Partners are responsible
for managing the day to day business and other statutory compliances. |
|
Statutory Meetings
|
Board Meetings and General Meetings
are required to conducted at appropriate time. |
There is no provision in regard to
holding of any meeting. |
|
Maintenance of Minutes
|
The proceedings of meeting of the
board of directors / shareholders are required to be recorded in minutes. |
A LLP by agreement may decide to
record the proceedings of meetings of the Partners/Designated Partners |
|
Voting Rights
|
Voting rights are decided as per the
number of shares held by the members. |
Voting rights shall be as decided as
per the terms of LLP Agreement. |
|
Maintenance of Statutory Records
|
Required to maintain books of
accounts, statutory registers, minutes etc. |
Required to maintain books of
accounts. |
|
Annual Filing
|
Annual Financial Statement and Annual
Return is required to be filed with the Registrar of Companies every year. |
Annual Statement of accounts and
Solvency & Annual Return is required to be filed with Registrar of LLP every year. |
|
Share Certificate
|
Share Certificates are proof of
ownership of shares held by the members in the Company |
The ownership of the partners in the
firm is evidenced by LLP Agreement. |
|
Audit of accounts
|
Companies are required to get their
accounts audited annually as per the provisions of the Companies Act, 1956, |
All LLP except for those having
turnover less than Rs.40 Lacs or Rs.25 Lacs contribution in any financial year are required to get their accounts audited annually as per the provisions of LLP Act 2008. |
|
Credit Worthiness of organization
|
Will enjoy Comparatively higher
creditworthiness from Partnership due to Stringent regulatory framework. |