LLP
An LLP is a combination of traditional partnership firm and a company. Some of its features are similar to a partnership firm and some with a company. It enjoys the status of a separate legal entity different from its owners. The liability of the owners is limited as against the traditional partnership firm where liability of the individual partners are unlimited. No partner is liable on account of unauthorized actions of other partners, thus individual partners are prevented from joint liability created by another partner’s misconduct.

Annually, two returns are required to be filed by every LLP. Form 8 for statement of accounts and solvency and Form 11 for annual return are mandatory returns of the LLP.

Yes. An existing firm or company can be converted into LLP.

There are a few similarities as well as a few differences between both types of business organisations i.e. the Private Limited Company and Limited Liability Partnership.

Both enjoy a feature of separate legal entity, the members have limited liability and the registration process for both is same. Further refer to the table below for analysis among the both organisations.

The most important step after LLP incorporation is to prepare and execute an LLP agreement and to file the same with ROC. This is a mandatory requirement.
Secondly, LLP can make an application for GST, Open current account of the company, Obtain MSME registration and apply for Trademark Registration.

Additional fees are payable for delay in filing of forms. The additional fees payable depend on the capital contribution and the number of delays in filing of forms.

COMPARATIVE ANALYSIS OF LLP AND COMPANY

 

PARTICULARSLLPCOMPANY
MembersMinimum 2 Designated PartnerMinimum 2 Member, 2 Director, Maximum 200 Members
LiabilityLimited, Except in case of Fraud and wrongful ActLimited Liability
Forms to be filedRegular-E-form-8 & Eform-11Form AOC-4, Form MGT-7, ADT-1, Form DPT-3, Form MGT-14, Form DIR-12 and many other forms as per the requirement.
Requirement as to maintenance of Statutory RecordsNo such Requirement.It is must to maintain statutory records as per Companies Act-2013.
Audit of AccountsRequire only if Turnover above 40 lacs or Contribution more than 25 lacs.Audit is Compulsory.
Management throughLLP agreement.Memorandum of Association and Article of Association of company.
Convening of MeetingsNo such requirementRequired to hold Meetings as per Section- 173.
Loans & borrowingsAs per LLP Agreement. No other requirements.There is Cap for Loans and Borrowings as per section 179 & 180, Require to hold Board Meeting and file form with ROC
DepositsNo such condition.Companies have to comply with the deposit rules. This compliance is tedious and restrictive if a company wants additional funds.
Related Party TransactionsNo RestrictionsTransaction to be at arm’s length price only and as per provisions of Secton-188 of Companies Act-2013.