Partnership, Company, LLP: Key Differences for Indian Businesses
Understanding Indian Business Structures: Partnership, Company, and LLP
Choosing the right business structure is a critical decision for any entrepreneur in India. This detailed comparison highlights the key differences between a Partnership Firm, a Company, and a Limited Liability Partnership (LLP) across various legal, operational, and administrative aspects.
| Category | Partnership | Company | LLP |
|---|---|---|---|
| Prevailing Law | Partnerships are governed by the Indian |
Partnership Firm Accounting: Fundamentals and Final Accounts
Fundamentals of Partnership Firm
Meaning of Partnership
A partnership is a business organization where two or more people join hands to run a business and share profits and losses.
Legal Definition (Sec 4 of Indian Partnership Act, 1932)
“Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”
Characteristics of a Partnership
| Feature | Explanation |
|---|---|
| Agreement | There must be an agreement (oral or written) between partners. |
Decoding Financial Instruments: Checks, Bills of Exchange, Shares
Check: Definition and Key Aspects
What is a Check?
A document ordering payment of a fixed amount in euros or convertible foreign currency.
- Drawer (Lliurador): The person or entity who issues the check.
- Drawee: The bank on which the check is drawn, obligated to pay.
- Payee: The person or entity to whom the payment is to be made.
Payment must be made at the indicated place, or at the place of issue if not specified.
Partial Payment of Checks
If the current account lacks sufficient funds to cover the full payment,
Read MoreIndian Business Law Essentials: Contracts, Sales, Partnerships, Companies
Law of Contract: Core Principles and Remedies
Definition of Contract (Section 2(h))
A contract is an agreement enforceable by law.
Essential Features of a Valid Contract (Section 10)
- Offer and Acceptance – Must be lawful and absolute.
- Intention to Create Legal Relationship – Parties must intend legal consequences.
- Lawful Consideration – Something in return must be legal.
- Capacity of Parties – Parties must be competent (age, sound mind, not disqualified).
- Free Consent – Consent must be given freely
Land Freight Contract: Parties, Terms, and Liabilities
Land Freight Transport Contract
A land freight transport contract is an agreement where one party (the carrier) undertakes, in exchange for a fee paid by the shipper, to transfer goods from one place to another and make them available to the person designated in the contract (the consignee).
Contract Elements
Parties Involved
- Carrier: Assumes the obligation to perform the transport in their own name, using their own transport facilities or those of others. There may be multiple carriers involved.
- Shipper
Understanding Partnership Essentials: Types, Dissolution, and LLP Act
Essentials of Partnership
Meaning and Definition: Section 4 of the Partnership Act 1932 defines partnership as “the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”
Key Elements of a Partnership
- Two or More Persons: There must be at least two persons to form a partnership. A person cannot enter into partnership with themselves. The maximum number of persons in a partnership should not exceed 10 in the case of banking business