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Introduction of LLP in India:

The concept of Limited Liability Partnership has been brought into by way of enforcing Limited Liability Act,
2008. The idea is to get the exibility of the Partnership and Bene ts of Corporate Body like Company to bring
together under one structure of organisation. Popular Recent

In this blog, we will discuss why registering a business as LLP is advantageous over partnership rm
How Partner and
registration.
Designated Partner
are di erent in an
The Comparison: LLP?
Dec 11, 2017

  Limited Liability Partnership Partnership Firm

Separate legal LLP is a separate legal entity and can hold assets in its The status of Partnership Firm Bene ts of choosing
LLP over Partnership
entity name. does not have separate identity
Firm
from its Partners. Aug 10, 2017

Liability of The liability of Partners is limited to the extent of their The liability of Partners is not
Partners contribution in LLP. Further, one Partner is not a ected limited and can extend to No Registration Fees
or not held liable for the actions of another Partner. personal assets of Partners. The for Companies
action of active Partner can hold Incorporation in
another liable. India
Jan 25, 2018
Number of Minimum 2 Designated Partners are required to from The ceiling limit on number of
Partners LLP. However, there is no ceiling limit on number of Partners is 50. Partnership Firm
Partners. having more than 50 Partners Procedure for
are declared as illegal Incorporation of a
Private Limited
association.
Company
Jul 25, 2017
Uninterrupted The existence of LLP is not a ected by change in the The Partnership Firm dissolves
Existence Partners of LLP. due to removal or death of
Partner subject to clauses of
What is Allowable
Partnership Deed. Remuneration to
Partners in an LLP?
Registration Registration of LLP is mandatory and it is registered Partnership Firm can be Aug 26, 2017
with Registrar of Companies on online portal of MCA. registered as well as
Hence, it gets bene t of Centralised Registration. unregistered. The registration, if
required shall be done with local
Registrar of Firm. No online
Follow us for updates
portal is available for its
registration.     

Statutory Statutory Compliances in case of LLP are in addition to There are no additional
Compliances compliance under Income Tax Act, as the LLP Act compliances prescribed except
mandates the same. These compliances ensure laid down under Income Tax Act.
 transparency of operations and nancials of the entity.
 Data The central
Blog Home Registration with
Business MCA allows 
Registrations availability of
Intellectual Any of the information
Properties or theBusiness 
Manage Your Grow Your Business 
availability Documents to Public except the Agreement between data of the Partnership are not
Partners. Also, one can see the last Balance sheet led disclosed on public platform.
with MCA in the Master data of the entity which creates
high creditability and reliability among the other parties
to the LLP

Higher Due to higher compliances and transparency in Compared to partnership rms,

Creditability operation, the credibility of LLP is higher and thus it other body corporates are
eases the fund raising from nancial institutions. having higher credibility and
hence are less preferable.

Uniqueness of The name of the LLP is unique and not identical or There is no restriction for using
Name similar to any other company or LLP, which helps to the name in case of Partnership,
establish distinctive image. furthermore it does not
necessarily help to establish
distinct image of Partnership.

Taxation LLP is considered as Partnership Firm for the purpose of Taxation Aspects. The taxation
Aspect: aspects are governed by Income Tax Act, 1961.

Agreement Operations of both the LLP and Partnership rm are administered by Agreement signed
Signed: between the Partners of the entity.

On the basis of above comparison above it is clear why LLP is elect over the Partnership Firm as it avails the
bene ts of the Partnerships with higher preference.

Nature of Simplicity of transaction is intact in the LLP and its distinguished position in Corporate World places
an LLP in far more advantageous position than a Partnership. Not necessarily everyone should opt for an LLP
but the one who are looking for long term growth and are willing to jump into corporate world without facing
the high restriction caused in case of Companies, the person may prefer LLP considering its advantages and
disadvantages.

By CS Prachi Prajapati | Aug 10, 2017 | Business Registrations , Other Business Structures

Share This Story:      

About the Author: CS Prachi Prajapati

Company Secretary with a forte in content writing! Started as a trainee, she is now
leading as a Content Writer and a Product Developer on technical hand of LegalWiz.in.
The author nds her prospect to carve out a valuable position in Legal and Secretarial
eld.

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