Should I Incorporate My Company As LLP Or A Private Limited Company

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Every LLP has to file an Annual Return within 60 days of closing of every financial year to ROC.


Presentation Transcript

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Should I Incorporate My Company As LLP Or A Private Limited Company If you are thinking of starting a business by LLP registration or private limited company registration Read this. Limited Liability Partnership is mixture of corporate structure and partnership firm. It is best for people who need flexibility in their own moves of business. As name suggest here the liability of partners can be limited to their agreed contribution in the LLP agreement. LLP is a hybrid between a company and a partnership. Salient features of LLP An LLP is a body corporate and legal entity separate from its partners. It has perpetual succession.

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Being the separate legislation i.e. LLP Act 2008 the provisions of Indian Partnership Act 1932 are not applicable to an LLP and it is regulated by the contractual agreement between the partners. Every Limited Liability Partnership shall use the words “Limited Liability Partnership” or its acronym “LLP” as the last words of its name. It contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’. Every LLP shall have at least two designated partners being individuals at least one of them being resident in India and all the partners shall be the agent of the Limited Liability Partnership but not of other partners. f. LLP agreement is not mandatory but in the absence of LLP agreement mutual rights and liabilities of partners shall be determined as provided under Schedule I to the LLP Act. If you have done LLP registration below are the compliance you should follow: 1. Every LLP has to file an Annual Return within 60 days of closing of every financial year to ROC. 2. LLP whose turnover exceed in any financial year forty lakh rupees

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or whose contribution exceed twenty five lakh rupees is required to get its accounts audited. 2. If you have done the private limited company registration below are the compliance you should follow: 3. Board Meetings 4. At least four board meetings need to be held in a year and at least one meeting needs to be held every quarter. Presence of the directors is needed for the meeting. Quorum is 1/3rd or 2 Directors whichever is greater. The meetings need to be logged and the signed minutes need to be maintained at the Registered Office. Annual General Meeting AGM This is a shareholders meeting that needs to be held every year. Approval of financial statements declaration of dividends appointment of auditors etc. is the primary agenda for this meeting. AGM needs to be held in the city where the registered office of the company is situated. Annual Filing of Forms

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There are a number of annual forms that need to be filed besides the annual financials. The information is quite detailed and talks about shareholdings directors financials etc. All these forms are required to be certified by a practicing Chartered Accountant or practicing Company Secretary. Companies having paid up share capital in the range of INR 1 million to 50 million are required to file a Compliance Certificate from a practicing company secretary. Yearly Forms by Directors The directors are required to inform the company about their directorship in other companies every year. Maintenance of Statutory Register Minutes Book

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A number of registers are required to be maintained such as‐ Register of Member Register of Directors Register of Contracts Register of Charges etc. The registers are required to be kept at the registered office of the company. EVENT BASED COMPLIANCES These are triggered based on happening of certain events. Examples are:  Receipt of share application money  Allotment of shares  Transfer of shares  Appointment/Resignation of directors  Appointment of Managing Director/ Whole Time Director  Executing agreement with related parties  Change in the Bank signatories  Change in the statutory auditors There is paperwork that needs to be done for the above and there are various deadlines for these tasks. In case of noncompliance or even a missed deadline there can be penalties additional fees or a compounding of offence etc. Hence it is necessary that the happening of such events be tracked and compliances met with on time. For More Information Visit Here:- Business Email Id:- Contact no:- 91 1204231116 Address:- NOIDA OFFICE G45 First Floor Sector 6 City - Noida 201301