1.Compare LLP vs Partnership Registration
Partnership Registration is governed by Partnership Act 1932. Its most popular registration for small and medium business. Its simple , cost saving and having less annual compliances. Where as LLP Registration comes under Limited Liability Partnership Act 2008 which required partners to have DIN Number and DSC. LLP registration is easy and gives various benefits to its partners. In this article discussing about choose between LLP and Partnership Firm and difference between LLP and Partnership Firm in India.
| S.NO. | Particulars | Partnership Firm | LLP |
| 1 | Name of the firm | No Specification | Name Should end with LLP |
| 2 | Minimum No. of Partners | Minimum 2 | Minimum 2 |
| 3 | Maximum No. of Partners | Maximum 20 | Infinite |
| 4 | Creation by | Firm Contract | Created by Law |
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2. Compare Cost of Registration
Cost of Registration for Partnership is lower as compared to LLP. As there is no need of DIN Number and DSC. Where as for LLP , partners need to have DSC and DIN Number. Also documents and form need to certified by Professional ( Like Chartered Accountant / Company Secretory ). For Partnership registration fees need to be paid at ROF department and for LLP pay at MCA.
| S.NO. | Particulars | Partnership Firm | LLP |
| 1 | Cost of Registration | 3500/- | Rs. 7500/- |
| 2 | Government fees | to ROF | to MCA |
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3.Compare Taxation of LLP Vs Partnership Taxation
For purpose of Income taxation LLP and Partnership firm considered as same. Income Tax rate for both is 30 % + education cess.
| S.NO. | Particulars | Partnership Firm | LLP |
| 1 | Income Tax Rate | 30% | 30% |
| 2 | ITR Filing Due Date ( No Audit ) | 30 July | 30 July |
| 3 | ITR Filing Due Date ( Under Audit ) | 30 September | 30 September |
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4. Annual Compliances LLP Vs Partnership Firm
LLP annual filing need to done by filing Form 8 and Form 11. Both form need to be filed online with use of digital signature. For non filing late fees of Rs. 100/- per day per Form is applicable. For Partnership Firm there is no need of doing annual compliances.
| S.NO. | Particulars | Partnership Firm | LLP |
| 1 | Annual Compliance – Form 8 | NA | Yes |
| 2 | Annual Compliance – Form11 | NA | Yes |
| 3 | Cost of Annual Compliances | NA | Rs. 2499/- Onwards at ANB |
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5.Conversion/Transfer LLP Vs Partnership Firm
Partners share in partnership firm can be transfer to another person. Firm simply need to amend firm agreement. Also Convert Partnership firm into LLP or Convert Partnership firm into Private Limited is possible.
Similar to firm , shares of LLP can be transferred to another person. Firm need to do filing at MCA and amend partnership agreement. A LLP can be converted to a Private Limited Company.
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6. Partners Liability difference LLP Vs Partnership Firm
The Partners liability under Firm is unlimited as per Partnership Act 1932. Partners are personally liable for liabilities of firm. In Legal definition Partners and partnership firm are not considered separate entities.
Major difference between LLP and Partnership firm is LLP’s Partners are not personally liable for liabilities of firm. There liability is limited to amount of capital contribution.
| S.NO. | Particulars | Partnership Firm | LLP |
| 1 | Partners Liability | Unlimited | Limited |
| 2 | Partners Liability to up | Unlimited | up to capital Contribution |
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7. Governing Body of Registration
| S.NO. | Particulars | Partnership Firm | LLP |
| 1 | Governing Body | Partnership Act 1932 | Limited Liability Partnership Act 2008 |
| 2 | Online Filing at | ROF | MCA |
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8. Foreign Direct Investment in LLP vs Partnership Firm
Foreign Direct Investment for Partnership firm in India is not allowed. FDI investment not possible in Firm. Where LLP can receive capital contribution under FDI.
| S.NO. | Particulars | Partnership Firm | LLP |
| 1 | FDI | Not Allowed | Allowed |
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9. DIN Requirement
As per Partnership Act 1932 for firm registration there is no requirement of DIN Number. Where for in LLP designated partners need to have DIN Number.
| S.NO. | Particulars | Partnership Firm | LLP |
| 1 | DIN Number | NA | DIN Required |
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Conclusion
From above discussion both LLP vs Partnership firm have own advantages and disadvantages. However LLP is gives name reservation that creates goodwill for firm. Liabilities of partners in limited upto capital contribution in firm. Also partners are not help liable for act of other partners.
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