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Monday, 23 September 2019

Difference between Limited Liability Partnership (LLP) and General Partnerhip

Difference between Limited Liability Partnership and General Partnership-

1. In the case of limited liability partnership, every partner has limited liability. In the case of a general partnership, every partner has unlimited liability. So in case of a general partnership, if the business assets are not sufficient to pay off business liabilities then personal assets of the partners can be used to pay off the business liabilities.

2. The limited liability partnership needs to be registered whereas in case of general partnership it is not mandatory to register the partnership.

3. In case of limited liability partnership, the firm has a separate legal identity whereas in case of a general partnership the firm doesn't have any separate legal identity.

4. In case of limited liability partnership, there is no restriction on the number of partners whereas in case of a general partnership the number of partners is restricted. There are restrictions on the maximum number of partners that a general partnership can have.

5. In the case of limited liability partnership, the continuity of the firm is not affected by death, lunacy or bankruptcy of a partner. In case of general partnership death, lunacy or bankruptcy of a partner dissolves the firm.

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