2) Registration: Registration is Compulsory for Limited Liability Partnership Act (LLP), however for Partnership its optional.
3) Separate Legal Entity: Limited Liability Partnership Act(LLP) is a separate legal entity, separate from its partners\ designated partners, however partnership is not separate legal entity from partners. Partners are collectively referred as firm.
4) Perpetual succession: Limited Liability Partnership Act(LLP) has perpetual succession, whereas Partnership does not have perpetual succession.
5) Formalities of Incorporation: Various documents / declarations in the e-forms are required to be filed with ROC along with filing fee for LLP incorporation, however Partnership deed along with form/ affidavit required to be filed with Registrar of firms along with requisite filing fees.
6) Legal Proceeding: Limited Liability Partnership Act(LLP) can also sue and be sued as it’s a separate Legal entity, however only registered partnership can sue.
7) Taxation: Limited Liability Partnership Act status in unclear, pending changes in income tax act, however Partnership is a separate taxable entity.
8) Ownership of Assets: The Limited Liability Partnership Act has ownership of assets and Partners only have capital contribution in the Limited Liability Partnership Partners have joint ownership of all the assets.
9) Capital Contributions: Liability of partners is limited upto their capital contribution however in case a partners acts with an intention to conduct fraud, they are personally liable. Liability of partners is unlimited
10) Dissolution by an act of partners / members / directors: Continuance of Limited Liability Partnership is not affected by the acts of its Partners. Partnership contract can be put to an end by anyone of the members on happening of event specified in partnership act, 1932.
11) Transfer ability of interest Rights/ interest of partners: Transfer ability of interest Rights/ interest of partners are transferable as per the provisions of LLP agreement. In the case of Partnership transfer ability of Interest subject to the mutual consent of all the members.
12) Books of Accounts: Books of accounts must be prepared as specified in the LLP Act.For Partnership it’s not applicable.
13) Audit of Accounts: As per the provisions of Limited Liability Partnership Act, accounts to be audited annually except for Limited Liability Partnership having turnover less than Rs. 40 lacs or Rs. 25 lacs contribution in any financial year. However in Partnership, the Audit of accounts is as per the provisions of Income Tax Act.
14) Annual Return: Annual Return is required to be filed with the ROC annually in the prescribed format and the same is not applicable for Partnership.
15) Director Identification Number / Designated Partner Identification Number: Each Designated partner required to have a DPIN before being appointed as a Designated Partner of LLP. Whereas no such requirement is there for Partnership.
16) Minimum Number of Member: Minimum two partners are required from LLP however in Partnership minimum two partner are required.
17) Maximum number of Member: No cap of maximum number of Partners in LLP, however in Partnership Maximum 10 for banking business and 20 for other business.
18) Meetings: Meeting of the Designated Partners have to be held at specific time period as per the Provisions of LLP Act. Whereas no such requirement for Partnership.
19) Minutes: Decisions taken in meetings must be recorded as minutes with in 30 days in case of LLP, whereas for Partnership it is not applicable.
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