Business Finance

Q whats the difference between the terms :-Proprietary vs Partneship Vs Trust Vs Private Limited ?

A

 Proprietary business is simplest form. PAN Card is same as individual.

No need of separate PAN.

No need to register with Ministry of corporate.

Minimal documentation.

GUMASTA is needed for record purpose.

Bank account is must

Drawback:
Liability lies on individual.
If business become bankrupt, bank can take personal property property.
Limited brand
Limited growth.

2.COMPANY is an organised business, registered brand.owner of a company / business is not much involved and there is wealth creation by increased valuation.it is one of the ways of creating exponential wealth in a short span of time.

3.PARTNERSHIP DEED REGISTRATION is a partnership between individuals.There is a separate pan card.

separate bank accounts and separate taxation.income is tax free in the hands of the owner.

Q: what is the Basic difference between proprietorship Partnership & Company

ANS:
Limited Liability partnership is same as partnership except Liability.
If business become bankrupt, banks cant attach personal property of partner

Q What is LLP? What is the difference between LLP and partnership and company? Any advantage over others?

ANS: This long answer questions.
Limited liability partnership is new entity placed between partnership and company.

Q: we run group Hospital with limited liability partnership firm . It’s five years now . Suppose someone decided to exit out of group , how the group should deal with such scenario?

I mean how do we calculate share he should get at the time of EXIT ?
ANS:
It will be depend upon Exit clause in LLP deed.
You will have to decide valuation and they pay exiting partner his share

QUESTION : Which is better for Husband and Wife Partnership Or LLP.As per my knowledge In Partnership Both have same risk financial and Medicolegal means Court case on Both Though she is not involved in treatment of patient Let’s assumes she is non medico LLP No Medicolegal risk.Please clarify which is better on both front

ANS:

  • Company should be first choice.
  • LLP as second choice
  • Partnership as third
  • Proprietary business as fourth

Q Can Partnership firm Transfered in LLP WHAT R ADVANTAGE AND DISADVANTAGES

ANS:
YES.
LLP deed
Advantage : Limited Liability. Otherwise its same as partnership
For a proprietary firm

Q Can/ should I available different PAN card in the name of hospital??

ANS: Pan is same as owner in proprietary business

Q For a proprietary firm Can/ should I available different PAN card in the name of hospital??

ANS: Pan is same as owner in proprietary business

Q-I am running a radiodiagnostic centre and last year opened a current account in its name.

Still I am not able to understand what advantage I am having by doing this.
Pls advise.
ANS: Current account is necessary for business

Question: if clinic is in the name of both husband and wife, how to show the expenses?

ANS: You need to establish separate business entity.
Keep your professional account separate

Q Me my wife have Ophthmic private practice (day care Center). Is it worth converting to pvt Ltd company. We have significant equipment & property loan taken. What are implications of making pvt ltd?

ANS:
If you want to make brand and Expand then company is better.
If its just ONE generation business then LLP would do.
Company need more compliance

Question Can a proprietary firm be converted to company?

ANS: Its not conversion.
Company needs to be established and bring assets of owners. It can be assets of
proprietor assets also

Question : I am single owner of diagnostic Centre. Can I change this to partnership firm with other parterns being my doctor father, non medico mother and non Medico wife ?

Answer: YES.
NonMedico can become partners.

Q-If husband wife are practicing together and land in the name of husband Is it better for both to have individual Practice Or Form a LLP and rent the place from Husband

ANS:
I recommend.
1.Keep business Entity separate
2. Keep husband and wife accounts and assets separate
If land is in your name, you take rent from business entity.

Question: Can HUF be partner in company/LLP

ANS: HUF can become investing partner

Q-If a am alone practicing my speciality, now for last 10 years as only OPD , do I have any chance other than proprietary?

ANS:

  • Keep business Entity separate.
  • It has advantage.
  • U just need little fees to CA .

Q- Can doctor become silent/sleeping partner in any other professional form like law or architectural fim? Ltd or LLP

ANS:
YES
In fact doctors must look for other business..

Question : Changing the ownership from proprietary to parternship will help to divide profit?.

Answer : Profit is divided as per deed.
But, taxation is little tricky.

Q-Can HUF be partner in Medical Practice & Partner in LLP

ANS: Investing partner only..

Q Non medico can become partner ??? Then it’s a clear diversion of income ???

ANS: Partner get income only if he invest or he work at his capacity.
E.g. If father is law is teacher and he become your partner. He wont get salary like doctor
get. At the most you would pay small amount of salary for management.
Partnership pays Tax itself, hence it doesn’t matter what you do of post Tax income..

Q How is LLP taxes

ANS. Same as partnership.
Except S44ADA is not available for LLP

Q: In view of exit strategy which is better a firm or company??

ANS: Exit of firm is very easy.
Exit of company is lengthy process of documents

Q Can I buy property on Huf name for clinic, and make official rental agreement and pay rent to it? For proprietary clinic

ANS: Only HUF funds should be used to buy property on name of HUF.
If you use ur funds then u attract Clubbing of income provisions
how do I create separate identity of it as business? I mean, I wanted to keep it separate
entity, from earning of which I shall withdraw professional fees…
E.g. clinic income is 5lac/annum, official expenses goes rent, vaccines etc goes
3lac/annum, 1lac/annum I will withdraw as professional income, and net profit will be 1lac..
with official bills of payment.. can I make it? Will pay tax on 1lac here and on professional
fees I received from clinic 1lac in my personal name?
ANS:
Business entity has separate pan card.
If it gives you professional income, it will be deducted expense to business. Now, you will
have to pay your own tax

Q: How one can withdraw money from available corpus if it’s LLP ? I heard if we withdraw money , share value decreases accordingly… is it true ?

ANS :
Share Value is depend upon asset value. If you withdraw asset (money) ,share value
reduce automatically

Q.In view of Tax Benefits/ its simplicity which one has a upper hand firm / proprietary/ company ?

If you want to expand business and create brand thenCompany
Otherwise LLP

Question: Can LLP be transferred into public limited company?

ANS: Good question.
NO. Entire process changes

Q Can I have separate PANCARD for proprietary firm (clinic).

ANS: NO
U get separate pan in Partnership, LLP, Company and trust

QUESTION :we 3 pediatrician having partnership firm but we not take equal amount though we have to show equal as per firm , so we want to change to pvt limited , what are pros and cons in doing so ?

Company.
Pros:

  • No liability
  • Brand
  • Credibility
  • Good governance

Q: In current scenario which is better a pvt limited hospital or a trust hospital ??

ANS:
Trust is little complicated matter.
Better to have Company or LLP

Q Is it better to have to have two PAN for a doctor one in name of clinic(business) and second(individual) for doing visit to various industries where he get paid as professional service. Or single pan card in name of business under which both clinic and professional visit can be shown Or should form a firm

ANS:
One person can’t have more than one PAN.
Doctor has one PAN.
Business entity has its own pan