Criteria for classification of Non-company Entities

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This discussion clarifies whether new classification criteria for non-company entities apply to Limited Liability Partnerships (LLPs). While LLPs are bodies corporate under the LLP Act, they are distinct from companies. The consensus is that the updated criteria, now referring to 'non-company' rather than 'non-corporate' entities, are indeed applicable to LLPs as they are not registered under the Companies Act.

Dinesh Prajapati

Dinesh Prajapati (Querist)

12 July 2021 Is new criteria for classification of Non-company Entities is applicable to LLP?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 July 2021 Yes, it's applicable......

Dinesh Prajapati

Dinesh Prajapati (Querist)

13 July 2021 but Sir, As per section 3 of LLP Act, LLP to be body corporate.
New criteria for classification is only for Non-company entities.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 July 2021 Limited Liability Partnership is a partnership where some or all partners have limited liabilities which may depend on the jurisdiction. It is basically the combination of advantageous features of both partnership and company form of organisation. LLP has introduced in India via Limited Liability Partnership Act, 2008.

Dinesh Prajapati

Dinesh Prajapati (Querist)

13 July 2021 Yes, LLP has introduced in India via Limited Liability Partnership Act, 2008.

As per section 3 of LLP Act, LLP is to be body corporate.

So i am saying New criteria for classification is only for Non-company entities so it should not be applicable to LLP, is it right?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 July 2021 Not right, It's a partnership not a company.
It may be a body corporate but not a company.
The classification is non company.
All the entities not registered under companies act is non company.

CS Divesh Goyal

CS Divesh Goyal (Expert)

20 July 2021 Completely Agree. LLP is never considered as Company. It is body corporate in form of Partnership Firm.

Dinesh Prajapati

Dinesh Prajapati (Querist)

14 August 2021 Thank you CA R Seetharaman Sir & CS Divesh Sir for your reply.

Yes, the new criteria for classification are applicable to LLP.

Before the word was used as "Non-Corporate", they have now changed to "Non-Company".

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