What is LLP?
A limited liability partnership is a partnership in which some or all partners have limited liabilities. It therefore can exhibit elements of partnerships and corporations. In an LLP, each partner is not
responsible or liable for another partner’s misconduct or negligence.
Who is proprietor?
A person who owns and usually manages a business
Features of LLP
1.It has a separate legal entity just like companies
2.The liability of each partner is limited to the contribution made by partner
3. The cost of forming an LLP is low
4.Less compliance and regulations
5.No requirement of minimum capital contribution
|`Particulars||Limited Liability Partnership||Sole Proprietorship|
|Liability||The partners have a limited liability which
extends to the amount of capital contributed
|The Proprietor has an unlimited liability which extends to the amount of his/her personal estate.|
|Act||Limited Liability Partnership Act,2008 governs the provisions and compliances of an LLP, failing which penalties are imposed.||There is no separate Act or laws which govern or define the compliance requirements.|
|Audit||Compulsory audit required if LLP crosses 40 lakhs turnover or 25 lakhs capital contribution||There is no compulsory audit requirement|
|Name||There is no exclusivity of the name. Anyone can
register a sole proprietorship with the same name having the same business in a different state
|There is exclusivity of the name. No one can apply for the same name in any other act|
|Tax Computation||An LLP has to pay flat 30% as income tax on
the income generated
|A sole proprietorship can use the
slab rates while computing their
||An LLP can expand by opening branch offices
in different states
|A sole proprietorship can only expand if it registers the same individually in different states|
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