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Difference between Partnership Firms and Limited Liability Partnership Firms

Difference between Partnership Firms and Limited Liability Partnership Firms-

S. No.


Partnership Firms

Limited Liability Partnership Firms


Applicability of Act

Partnership Firms are regulated under Partnership Act 1932

Limited Liability Partnership Firms are established under Limited Liability Partnership Act 2008


Whether registered or not

Partnership Firms may be registered or non-registered i.e. there is no compulsion to register them.

Limited Liability Partnership Firms have compulsory to register them i.e. there is no option to choose whether registered or not.


Registering Authority

Partnership Firms if registered under “Registrar of Firms”

LLPs are registered under “Ministry of Corporate Affairs”


Addition of LLP with his name

Partnership Firms have no requirement to add any additional name at the end of his name i.e. M/s Vertex Industries

Limited Liability Partnership Firms used LLP at the end of his name. i.e. M/s TAB SOLUTIONS LLP



Number of Partners


Maximum 100 (as per companies act 2013, earlier it was 20)


Maximum-No limit


Liability of Partners


Limited to the extent of amount Invested


Ownership on Assets

Partners have the full right on assets of the firm

Partners have no right on assets of the firm


File case to Sue others

The firm can sue but cannot be sued by others

The firm can sue and can be sued by others


Requirement of Digital Signature Certificate

There is no requirement of DSC

DSC is required for at least one of partner


Requirement of Director Identification Number

There is no requirement of DIN

Mandatory of DIN is required


Annual Return to MCA

Not Applicable

Mandatory to file Annual Return to MCA


Name of Agreement with Partners

Name of agreement with partners are called “Partnership Deed”

Name of agreement with partners are called “LLP Agreement”


Audit of Accounts

As per Income Tax Act Applied

As per LLP Act. If the Turnover exceeds Rs. 40.00 lakhs or the contribution exceeds Rs. 25.00 lakhs


Minutes of Meeting

Not Applicable

As per LLP Agreement


Separate Legal Entity

Not Applicable

LLPs are specified as separate legal entity


Dissolution of partnership

As per mutual consent of the partners, by order of the court, Insolvency or bankruptcy

Voluntary by law


Merger, Amalgamation or Compromise

Not Applicable

Can enter in to Merger, Amalgamation or compromise



Depends upon the operation of the firm

Higher as compared to partnership firm


Formation Cost

It has low formation cost say negligible

It has lightly higher formation cost as compared to partnership firm.



Termination of Partnership

The Partnership deed may be terminated if any partner is expired or resigned

The LLP agreement is not terminated if any partner is expired or resigned.



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