Excess withdrawl from capital by a company in llp

We have drawn our conclusion on the basis of provisions of Company Act 2013

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”.

For further queries & clarifications visit www.thecompanydesk.webatu.com

Or write us at thecompanydesk @ gmail.com

Pankaj Kabra

The Company Law Desk