1.
Non Corporate Entities
Presented By:
Monika
Nadim Ashraf
Nikhil Agarwal
Sunkara Gokul
Subhashree Dash

2.
SOLE
PROPRIETORSHIP

3.
FEATURES
• One man control
• Unlimited liability
• Non-tax entity
• Profits & Losses not shared by anyone
• No perpetual existence
• Need not be registered

4.
ADVANTAGES
• Easy to form and wind up
• Better Control
• Secrecy is maintained
• Sole decision maker
• Flexibility in operations, easy tax filing.

5.
DISADVANTAGES
• Limited capital
• Unlimited liability
• No perpetual succession
• Limited size
• Lack of managerial expertise
• Unwarranted expenses
• Not suitable for large scale business

6.
HINDU UNDIVIDED FAMILY
• Formation of HUF: Governed by Hindu Law.
• Membership: Two types of members Karta, Co-
parceners and members.
• Liability: The liability of Karta is unlimited,
however the coparceners are limited.
• Partition: any coparcener who is unsatisfied with
the decision of Karta can demand partition.
• Secrecy is maintained.

7.
PARTNERSHIP

8.
ESSENTIAL CHARACTERISTICS
• Association of two or more persons
• Agreement
• Sharing Of Profits
• Mutual Agency

9.
PARTNERSHIP DEED
• Legal document created before/during the
commencement of partnership firm.
• It must be signed by all the partners of the
firm.

10.
It includes the following:
• Name of the partners
• Date of commencement
• Duration of partnership
• Name of the firm
• Capital contributed by members
• Profit/Loss sharing ratio
• Location of the firm

11.
RIGHTS OF A PARTNER
• Right to take part in the partnership business.
• Right to be consulted in partnership business &
freedom to express his views before any
decision is taken by other partners.
• Right to have access, inspect and take copy of
any book of accounts of the firm.
• In absence of any agreement to the contrary,
partners are entitled to share equally
the profits and losses of the firm.

12.
RIGHTS OF A PARTNER
• Right to do all acts necessary to protect the firm
from losses.
• To receive interest on a capital.
• Every partner has right to retire:
1. With consent of all partners.
2. In accordance with the terms.
3. By giving notice to all partners.

13.
DUTIES OF A PARTNER
• To attend diligently to his duties in the conduct
of the business.
• Not to carry a business which competes to the
present business of the firm.
• To be faithful to each other.
• To render true accounts and full information.
• To contribute towards the losses
sustained by the firm.

14.
Meinhard v. Salmon
Facts:
• Salmon – owner of 20 year lease on a hotel,
defendant.
• Meinhard – formed partnership with Salmon,
investor, plaintiff.
• Gery – third party, owner of the leased hotel.
• After 20 years, defendant entered
into a new lease with the third party
and resigned from the existing without
informing the plaintiff.

15.
Meinhard v. Salmon
Issue:
• Meinhard argued the new opportunity belonged
to the partnership.
• Salmon argued any interest in the new lease
could not belong to the partnership.
Provisions:
• Partners have right to be consulted.
• Partners owe fiduciary duties.
• Duty of communication.
• Duty of loyalty.

16.
LIMITED LIABILITY
PARTNERSHIPS

17.
SALIENT FEATURES
The LLP:
• is a corporate body with a perpetual succession.
• must have either the word “limited liability
partnership” or the acronym “LLP”.
• shall not be regulated by the law relating to
partnership.
• has no limit on the maximum number of partner.
• shall be registered with the ROC
under the companies act, 1956

18.
• The liability of the partner is limited.
• shall maintain proper books of account.
• Inspector may be appointed by the central
government to investigate the affairs.
• The property of the LLP shall be treated as the
property of the partner.
• A partner of LLP can freely transfer his
economic interest either in or in a part of third
person.
• LLPS can now electronically file
their return.

19.
INSOLVENCY LAW

20.
FEATURES
Contained in 2 enactments:
• The Presidency Towns Insolvency Act
• The Provincial Insolvency Act
A person is be judged as insolvent when he:
• is a ‘debtor’,
• is competent to form contract,
• has committed an ‘act of insolvency’.

21.
ACTS OF INSOLVENCY
• Where debtor makes a transfer either in India or
elsewhere for the benefit of his creditors.
• If debtor makes any transfer of his property with
the intention to defraud or delay creditors.
• If he has given notice to any of his creditors that
he has/is likely to suspend the payment of his
debts.
• If debtor is imprisoned in the
execution of any decree of a court
for the payment of money.

22.
ACTS OF INSOLVENCY
If the debtor:
• Leaves or stays out of India
• Leaves his usual place of business or otherwise
absents himself
• Hides himself so as to deprive his creditors or
means of communicating him.

23.
REFERENCES
• Elements Of Mercantile Law by
N.D.Kapoor
• Legal Environment Of Business(Text
Book)