Types of Partnership:
There are two forms of partnership, one registered partnership and the other non-registered. As far as the Indian Partnership Act, 1932, (Act) is concerned, the only requirement for starting a business as a partnership is to finalize and execute a partnership agreement between partners. The Act does not require registration of the Partnership Deed / Partnership Firm and, in other words, does not require that the Partnership Firm be a registered company. Specific partnership companies, therefore, operate as unregistered companies.
Difference Between Partnership & LLP
LLPs are regulated under the corporate ministry, central government, in India. Partnership companies are registered with the company registrar, Licensed by the respective state government where the company is registered.
Limited Liability Protection
A Limited Liability Partnership’s main advantage over a traditional partnership firm is that one partner in an LLP is not responsible or liable for misconduct or negligence of another partner. An LLP also provides proprietors with limited liability protection from the LLP debt. Unlike private limited company shareholders, though, an LLP’s partners have the right to directly operate the firm.
Number of Partners
LLPs and partnership firms must have to register a minimum of two partners. Post incorporation, there can be unlimited partners to an LLP. In the case of a Partnership Firm, if at any time the number of partners drops below the mandatory minimum of 2 due to a Partner’s death, disability or resignation, the Partnership Firm would be dissolved. On the other hand, if the number of partners drops below 2, in the case of an LLP, the sole partner can still find a new partner to fill the position without the LLP being dissolved.
As identity and address proof of the Partners, any of the following two documents can be submitted:
- PAN Card
- Drivers License
- Aadhar Card
- Voters ID