Partnership vs LLP , what to choose , why ? compare ?

LLP Disadvantages

LLPs face higher compliance needs, including annual MCA filings like Form 8 and Form 11, plus audits above certain thresholds.

so if within family
Partnership firm is easy, and good

if with outsiders
then LLP is better

Second Factor

for small scale business : Partnership firm is sufficient
for medium/large scale.. LLP is better

Comparison Chart

Aspect	LLP Advantages	Partnership Advantages
Liability	Limited to contribution; personal assets safe	None—unlimited liability risks personal assets
Legal Status	Separate entity with perpetual succession	No separate entity; simpler but unstable
Management	Flexible roles via agreement	Quick decisions by mutual consent  + Flexible
Formation/Cost	Moderate setup and filings	Very easy Lowest cost, minimal formalities
Closure	Difficult	Very easy Lowest cost, minimal formalities

LLPs offer limited liability protection, while partnership firms expose partners to unlimited personal liability. Key differences in advantages and disadvantages stem from legal structure, compliance, and operational flexibility under Indian law.

 

Cost to “shut down” or close is considerable in LLP

EFFORT to close is considerable in LLP

So, if you are 100% serious and business has reached 5 crores p.a., then make a LLP

if business is yet to start… then no immediate need of LLP… start with Partnership Firm first.. that is our professional advise to MSME’s

 

ROC fees for delay in filing

Starts on per day basis

again… make LLP , only if you are serious about it