What is the Difference Between a Partnership and a Limited Liability Partnership (LLP) in India? 🤝🏢
Thinking of starting a business in India? 🤔 Many clients often ask—"Should I form a traditional partnership or go for an LLP?" Let’s break down the key differences and help you choose the right one! 🚀
📌 What Is a Partnership?
A partnership is a business structure where two or more individuals come together to run a business with shared profits, losses, and responsibilities. In India, it is governed by the Indian Partnership Act, 1932.
✔️ Joint Liability – Partners are personally liable for the business’s debts and obligations.
✔️ Simple Formation – A partnership agreement is needed, but no formal registration is mandatory.
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🔍 What Is a Limited Liability Partnership (LLP)?
An LLP is a business structure where partners enjoy the benefits of limited liability while maintaining the flexibility of a partnership. It is governed by the Limited Liability Partnership Act, 2008.
✔️ Limited Liability – Partners’ liability is limited to their contribution in the LLP, protecting their personal assets.
✔️ Mandatory Registration – Unlike a partnership, an LLP must be registered with the Registrar of Companies (RoC).
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⚠️ Key Differences Between Partnership and LLP
| Feature | Partnership | Limited Liability Partnership (LLP) |
|---|---|---|
| Liability | Joint & Several Liability – Partners are personally liable for debts. | Limited Liability – Personal assets are protected. |
| Registration | Not mandatory (but recommended). | Mandatory registration with RoC. |
| Management | Shared equally unless stated otherwise in the partnership deed. | Flexible management structure. Can appoint designated partners. |
| Continuity | Dependent on partners. If a partner leaves, the partnership may dissolve. | Perpetual Succession – LLP continues even if a partner leaves. |
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💡 Benefits of Choosing LLP Over Partnership
✔️ Personal Asset Protection – Your personal wealth is safer in an LLP. 💼
✔️ Better Credibility – LLPs tend to have a more professional image in the business world. 🏆
✔️ Tax Benefits – LLPs can avail of various tax deductions and exemptions for better financial management 💰
#TaxBenefits #BusinessStructure #LegalBusiness #AssetProtection #BusinessCredibility
💼 Need Help Deciding Between a Partnership and an LLP?
At Lexis and Company, we provide expert consultation on business structures, legal advice on partnerships, and LLP formation to ensure your startup is built on solid legal grounds. 🏛️🚀
📞 Call Now: +91-9051112233
🌐 Website: https://www.lexcliq.com
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