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Compare LLP and Private Limited Company
February 3, 2019
GST On Payroll Services
February 5, 2019

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

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

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

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

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.


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

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

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

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

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.


Want to Consult a Registration Expert?

ANB is having team of professionals who can help in choosing right business mode. We are one stop solution for your Business registration and further advise and compliances. We help is GST Filing , Income Tax Filing , LLP Annual Filing. Our services are quick and reliable.



     

     

     

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    A. N. Bhutada & Co. is trusted and versatile Chartered Accountant In Pune India. The firm have been providing various services under one roof in the field of Company Registration, Accounts outsourcing, Auditing, GST Audit, Filing in India.

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