Difference between LLP and Partnership

LLP

Partnership

1. A limited liability partnership is a combination of a company and a partnership, where the partners have a limited liability towards the debts and obligations of the partnership.

1. A partnership is an arrangement where two or more individuals or partners come together to carry on business and share their profits and losses in the ration agreed upon.

2. A limited liability partnership is governed by the Limited Liability Partnership Act, 2008.

2. A partnership is governed by the Partnership Act, 1932.

3. LLP is a separate legal entity and therefore, can be sued or it can sue others without involving the partners.

3. A Partnership firm is not distinct from several persons who compose it.

4. The partners of an LLP would have limited liability.

4. Whereas, partners of a firm would have unlimited liability.

5. The retirement or death of a partner would not dissolve the LLP.

5. The death or retirement of a partner would dissolve the partnership firm.

6. LLP is formed by an incorporation document and an LLP agreement, thus, giving it legality.

6. A partnership can be formed either orally or by a deed of agreement whether registered or not.

7. LLP can have more than that number since no upper limit has been laid down by the Act.

7. A registered or unregistered partnership cannot have more than 20 partners.

8. The registration of a limited liability partnership is done with the Ministry of Corporate Affairs.

8. A partnership is registered with the Registrar of firms.

9. A limited liability partnership can hold property in its own name.

9. A partnership cannot hold property in its own name.