What is the Difference Between LLP and Partnership?

Here are the common differences between an LLP and a partnership: 

1. LLP is governed by the Limited Liability Partnership Act, 2008, and a partnership is governed by the Indian Partnership Act, 1932. 
2. Registration of the LLP is mandatory, and registration of a Partnership firm under the Indian Partnership Act is not mandatory. 
3. For the Registration of an LLP, they need to submit all the e-forms to the Registrar of Companies, and the partnership firm must register itself with the Registrar of Firms. 
4. The LLPs are created by the Law, and the partnerships are created based on contracts. 
5. The binding documents of an LLP are the charter document, and the binding documents of a partnership are the charter document. 
6. An LLP must file its statements of accounts and annual returns to the Registrar of Companies every year, and the partnership firm doesn't need to file the annual returns with the Registrar of Firms. 
7. LLPs are allowed to enter into contracts in their name, but partnership firms are not allowed to enter into contracts in their name.
8. Separate legal entity for the LLPs, and partnerships don't have a separate legal entity. 
9. The partners' liability in the LLPs is limited to their contribution, but in the partnership firm, the partners have unlimited liability. 
10. LLP has a common seal, which is used to sign any document, but in a partnership firm, they don't have a common seal, and only the authorized partners can sign the official documents. 
11. LLPs are designed to administer the day-to-day business management and other compliances of an LLP, whether partnership firms administer their business on their own, and they don't require any additional management. 
12. LLP can only be dissolved by order of the National Company Law tribunal (NCLT), and the partnership firm can be dissolved by the mutual agreement between the partners or by court orders, consent of partners, etc.  

An LLP is a corporate business that combines the benefits of a company and a partnership firm. It is a connection between a company and a partnership firm, and is incorporated as both a property structure. LLP helps entrepreneurs, investors, and professionals become more disciplined and scientific, providing services tailored to their specific needs. On the other hand, a partnership is an agreement between two or more partners who are ready to contribute their capital and set up the business, and share equal business profits. It is the oldest form of business structure and, as compared to LLP, it is easier to manage because it has a minimum set of rules and regulations.

The partner's liability in the LLP is limited to the extent of the capital contribution, whereas in a Partnership, the liability of the partnership is unlimited. 

The ownership of assets in the Limited liability partnership is assets which are independent of the owners. In an LLP, no partner owns the LLP's assets; every partner has their own assets. 

In the partnership, they have joint ownership, which means all the assets belong to the partnership, and the firms cannot have their own assets. 

Here are some of the key differences between LLP and Partnerships:  

• LLP is governed by the Limited Liability Partnership Act, 2008, and Partnership is governed by the Indian Partnership Act, 1932. 

• The registration of an LLP is essential, and the registration of a Partnership firm is voluntary. 

• LLPs are created by the law, whereas a partnership is created by a contract. 

• You need to file the LLP annual form, and in a partnership, you don't need to file an annual form. 

• There is no limit on the number of partners in the LLP, whereas in a partnership, it holds property in its name, and all the names of partners per the partnership deed.