Industrial laws
This query is : Resolved
02 June 2009
Can anyone please give me a distinction between Company and Limited Liability Partnership? Please help.
Ankur Garg
(Expert)
04 June 2009
Difference between LLP & “traditional partnership firm”
1. Under “traditional partnership firm”, every partner is liable, jointly with all the other
partners and also severally for all acts of the firm done while he is a partner.
2. Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct.
Difference between LLP & a Company
1. A basic difference between an LLP and a joint stock company lies in that the internal
governance structure of a company is regulated by statute (i.e. Companies Act, 1956)
whereas for an LLP it would be by a contractual agreement between partners.
2. The management-ownership divide inherent in a company is not there in a limited
liability partnership.
3. LLP will have more flexibility as compared to a company.
4. LLP will have lesser compliance requirements as compared to a company.
Regards
1. Under “traditional partnership firm”, every partner is liable, jointly with all the other
partners and also severally for all acts of the firm done while he is a partner.
2. Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct.
Difference between LLP & a Company
1. A basic difference between an LLP and a joint stock company lies in that the internal
governance structure of a company is regulated by statute (i.e. Companies Act, 1956)
whereas for an LLP it would be by a contractual agreement between partners.
2. The management-ownership divide inherent in a company is not there in a limited
liability partnership.
3. LLP will have more flexibility as compared to a company.
4. LLP will have lesser compliance requirements as compared to a company.
Regards
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