Advice regarding formation of a llp/company

Hello,

If an entity(with 2 foreign national directors/partners) wants to start operating in trading(both local purchase/sale and import/export of organic products(both food and non-food), which of the forms of the given below organizations would you advise:

a) LLP

b) Pvt Ltd Company

Considering in mind that It should easily be able to obtain Foregin Funds, Contribution, Foreign Inward Remittance etc.

I've read that it is easier for a Pvt Ltd Company to obtain permission for the same than as compared to an LLP. In other words, there are restrictions in certain cases for an LLP to obtain Foregin Funds. Is this so?

Obviously, if both are at par, it would be better to opt for LLP since its tax rates are a little lower(due to surcharge not applicable), no DDT and also it has less formalitles like audit not compulsory unless t/o>40 lacs or capital>25 lacs.... Also, I believe the cost of formation of an LLP is much lower than a Pvt Ltd Company.

Formation of LLP/COMPANY Before forming LLP/Company you should pay attention to the following, Cost of Formation; Minimum Statutory fee for incorporation of Private Company is Rs.6,000/- and minimum Statutory fee for incorporation of Public Company is Rs. 19,000/- Minimum cost of Formation of LLP is Rs. 800 only, comparatively much lesser than the cost of formation of Company Tax Liability; Income of Company is Taxed at a Flat rate of 30% Plus surcharge as applicable.Income of LLP is taxed at a Flat rate of 30% plus education cess as applicable. Transfer / Inheritance of Rights; Ownership is easily transferable in case of company. Regulations relating to transfer are governed by the LLP Agreement. Transferability of Interest; A member can freely transfer his interest in case of company. A partner can transfer his interest subject to the LLP Agreement Contracts with Partners/Director; In case of company ,Restrictions on Board regarding some specified contracts, in which directors are interested.Partners are free to enter into any contract Audit of accounts; Companies are required to get their accounts audited annually as per the provisions of the Companies Act, 1956. All LLP except for those having turnover less than Rs.40 Lacs or Rs.25 Lacs contribution in any financial year are required to get their accounts audited annually as per the provisions of LLP Act 2008. Applicability of Accounting Standards. Companies have to mandatorily comply with accounting standards. The necessary rules in regard to the application of accounting standards are not yet issued.

Menu

yashsr

CS Mitesh Mehta

Leave a Reply

Recent Threads

Related Threads