LIMITED LIABILITY PARTNERSHIP-
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Features of LLP
• LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
•The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
• The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.
• Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct.
• Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity.
Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.
Advantages of LLP
LLP form is a form of business model which:
(i) is organized and operates on the basis of an agreement.
(ii) provides flexibility without imposing detailed legal and procedural requirements
(iii) enables professional/technical expertise and initiative to combine with financial risk taking capacity in an innovative and efficient manner.
NON BANKING FINANCIAL COMPANIES
Features of NBFC–
-NBFCs are not subject to the banking regulations and oversight by federal and state authorities adhered to by traditional banks.
-Investment banks, mortgage lenders, money market funds, insurance companies, hedge funds, private equity funds, and P2P lenders are all examples of NBFCs.
-Since the Great Recession, NBFCs have proliferated in number and type, playing a key role in meeting the credit demand unmet by traditional banks.
Definition of Partnership firm–
Partnership is an association of two or more persons who have mutually decided to carry out business activities jointly and share its profits as well as losses. The partnership agreement may be written or oral.
Features of Partnership firm –
1. Agreement: The partnership arises out of an agreement between two or more persons.
2. Profit sharing: There should be an agreement among the partners to share the profits of the business.
3. Lawful business: The business to be carried on by a partnership must always be lawful.
4. Membership: There must be at least two persons to form a partnership. The maximum number is 20. But in case of banking business the maximum is 10 members.
5. Unlimited liability: The liability of every partner is unlimited, joint and several.
6. Principal-agent relationship: Every partner is an agent of the firm. He can act on behalf of the firm. He is responsible for his own acts and also for the acts done on behalf of the other partners.
7. Collective management: The firm and the partners are one. When a contract is made in the name of the firm all the partners are responsible for it individually and collectively.
8. Non-transferability of shares: A partner cannot transfer his share of interest to others without the consent of the other partners.
- Definition of Trust-
According to Indian Trust Act, trust means an obligation annexed to the ownership of property, & arising out of a confidence reposed in & accepted by the owner for the benefit of another or for another and owner.
- Features of Trust-
1. The person who declares the confidence is called the author of the trust.
2. The person who accepts the confidence is called trustee.
3. The subject matter of the trust is called trust property or trust monetary.
4. The written document through which trust is created is called instrument of trust.
5. The person whose benefit the confidence is accepted is called beneficiary.
Definition of Non-Profit Company-
As per Section 8 of the companies act, 2013 A Non-Profit making Company is a Company which:
(a) Has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object;
(b) Intends to apply its profits, if any, or other income in promoting its objects; and
(c) Intends to prohibit the payment of any dividend to its members.
- Features of non-profit company-
1. Many privileges and exemptions under Company Law vide notification dated 05th June, 2015.
2. Exemption of Stamp duty for registration.
3. Registered partnership firm can be a member in its own capacity.
4. Tax deductions to the donors of the Company u/s. 80G of the Income Tax Act.
Definition of society
The device of “society” was evolved to fulfill the need of an institution of non-commercial nature for promotion of numerous charitable activities like education, art, religion, culture, music and sport etc.
Associations, clubs or societies are formed to help further these causes because they work on non-profit basis.
The need for a legal entity, which could own, possess and manage the funds and assets for achievement of charitable or promotional objects, as laid down by donors, is the result of these endeavours. A society can be formed to achieve this end.
A society has been variously defined. It has been described as a company or association of persons (generally unincorporated) united together by mutual consent to deliberate, determine and act jointly for common purpose.
ONE PERSON COMPANY
Definition of One Person Company-
A new concept has been introduced in the Company’s Act 2013, about the One Person Company (OPC). In a Private Company, a minimum of 2 Directors and 2 Members are required whereas in a Public Company, a minimum of 3 Directors and a minimum of 7 members. A single person could not incorporate a Company previously.
One Person Company (OPC) is a company incorporated by a single person. Before the enforcement of the Companies Act, 2013, a single person could not establish a company. If an individual wanted to establish his business, he/she could opt only for a sole proprietorship as there had to be a minimum of two directors and two members to establish a company.
- Features of One Person Company-
1. Minimum and Maximum of one member.
2. A nominee should be appointed before incorporation.
3. Consent of the nominee should be obtained in Form INC-3.
4. The name of the OPC must be selected as per the provisions of the Companies (Incorporation Rules) 2014.
5. Minimum authorised capital of Rs.1 lakh.
6. DSC of the proposed director.
7. Proof of registered office of the OP
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