What Are the Differences between LLP Company and Partnership?

What Are the Differences between LLP Company and Partnership?

"Call Our Business Plan Experts at +91-72999-72500"

The main difference between a partnership and an LLP is the level of liability protection that partners receive. In an LLP, the personal assets of a partner are not at risk of being taken to pay off any legal or financial debts that the business incurs, unless the partner was directly involved in the commission of fraud by the business.

An  difference between a partnership and an LLP  is a separate legal entity with a distinct personality, and its members can enter into contracts, own property and sue or be sued in their own name.  In addition, an LLP is considered a separate legal entity and can own assets, enter into contracts, and be sued in its own name, as opposed to a general partnership which cannot do these things. Likewise, an LLP is required to maintain books of accounts and statutory registers. The LLP must also prepare and file annual accounts.

Additionally, if you want to raise capital for your LLP, you will need to follow a formal procedure and register the company with the relevant state authorities. Similarly, the LLP needs to publish details of its members and directors in some states, unlike a traditional partnership which does not require this.

The LLP is an ideal structure for businesses that involve professional services such as law firms or group medical practices. Partners can assign different management roles and responsibilities based on their financial investment in the business or their expertise and professional strengths.  Also, if an LLP's members want to add or retire a partner, the operating agreement should provide for this process MCA Portal. A written partnership agreement, created with the help of an attorney, will help ensure that all owners are on the same page about the percentage of ownership and management responsibilities.

 

Tel:+917299972500

info@filingpoint.com