18 April 2014
Meaning of drawings – Drawing means withdrawal of money from the capital by a partner from partnership firm for personal purposes Drawings in relation to a company: Company being an artificial person generally withdraws money from the partnership as disinvestment. Excess withdrawal of capital by a company from LLP: According to Rule 2 (c) of Acceptance of Deposits Rules, “Deposits includes any receipt of money by way of deposits or loan or in any other form, by a company unless otherwise exempted” Thus the withdrawal from LLP (in excess of capital) may be treated as deposits and the same can be treated as deposits in “other forms”.
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