comparison of corporate vehicles in india

EFS Consultants (India) Pvt. Ltd.

A comparison between the corporate vehicles available in India

Pradeepchandra Shukla Corporate Lawyer at EFS Consultants

© 1995 -2010 EFS Consultants Ltd

Conducting Business in India Can be Daunting


• Authorities and structures are not always straight forward and easy to understand

• Several governmental licenses maybe required

• Business environment is bureaucratic

• English is only spoken from middle management upwards

Benefits Of Private Limited Company Pvt. Ltd.Benefits of Private Limited Company


• Separate legal identity

• Perpetual succession

• Limited liability

• Less restrictions regarding membership and issue of shares. Except that minimum of two members are required for a private limited company

• No restrictions on powers of board of directors and conducting of meetings.

• No restrictions on remuneration to directors, managing director or managers.

• No restriction on appointment and remuneration of auditors.

• Least interference by authorities regarding conduct of internal business of company.

• No person other than a member can inspect or obtain copies of ‘profit and loss account’ of a private limited company.

• Strict provisions regarding method of determination of net profit and ascertainment of depreciation do not apply for a private limited company.

• No restrictions in making loans or investments or giving guarantee etc. to anybody.

• Business can be commenced immediately on incorporation even before obtaining the ‘Certificate of Commencement’ from the Registrar

Benefits of Limited Liability Partnership LLPBenefits of Public Limited Company


• Open membership to subscribe for shares

• Free transferability of shares

» It provides stability to the company as subscribers or members can freely transfer shares to anybody.

» Investors / members / shareholders have better liquidity for their investments; therefore they prefer to invest more in these PLC’s.

• Strict compliance requirements

• Company’s brand value increases if it is a PLC.

• Since the share price of any PLC reflects the company’s actual financial healthiness, it becomes easy to arrive at a price in case of mergers

and acquisitions. A PLC for its further business expansion may go in for mergers and acquisitions.

• PLC is a natural corporate structure for expansion of any business.

04/08/23 Free template from www.brainybetty.com 5

Benefits of Limited Liability Partnership LLPBenefits of Limited Liability Partnership LLP


• Separate Legal entity

• No requirement of minimum capital contribution

• Personal assets of the partners are not exposed except in case of fraud

• Less Cost of formation (Compared to a company)

• Foreign LLP firms can sign/register their names currently without conducting business and reserve their names for future use for self or to avoid misuse of name by other entities. This can be done for the period of 3 years maximum at a time and then later on renewal is required. Some filing requirements have to be done separately for this.

• No requirement to maintain statutory records except Books of Accounts

• No restrictions as to maximum number of partners

• No surcharge is levied on income tax

• Easy to dissolve or wind-up

• The profits and losses of the LLP would not pass through in the hands of the partners but would be assessable in the hands of the LLP

04/08/23 Free template from www.brainybetty.com 12

Benefits of Limited Liability Partnership LLP



Thank youFrom

EFS Consultants (India) Pvt. Ltd.

comparison of corporate vehicles in india

Education