A side-by-side comparison of Limited Liability Partnership and Partnership Firm — cost, timeline, liability, compliance, taxation, and which one is right for you in 2026.
The short answer
Choose LLP for limited liability and a separate legal identity — almost always the better choice today. Choose a traditional Partnership Firm only if you want the absolute simplest setup and accept unlimited personal liability.
| Criteria | LLP | Partnership |
|---|---|---|
| Professional fee (from) | ₹10,000 | ₹8,000 |
| Govt. fees | ₹2,000–₹5,000 | ₹500–₹2,000 (stamp duty) |
| Timeline | 12–18 working days | 10–15 working days |
| Liability | Limited to contribution | Unlimited — partners personally liable |
| People required | 2 designated partners | 2 partners |
| Raise equity funding? | No equity funding (partners only) | No equity funding |
| Compliance burden | Medium — annual return + statement of accounts | Low — no mandatory ROC filings |
| Taxation | Flat 30% on profits, no dividend tax | Flat 30% on profits |
| Credibility | High for professional firms | Moderate |
| Conversion | Can convert to Pvt Ltd | Can convert to LLP or Pvt Ltd |
Best for: Professional service firms, consultancies, CA/legal/architecture practices with 2+ partners
Pros
Cons
Best for: Small local businesses and family partnerships that want simplicity over protection
Pros
Cons
What is the main difference between LLP and Partnership?
Limited Liability Partnership: Professional service firms, consultancies, CA/legal/architecture practices with 2+ partners. Partnership Firm: Small local businesses and family partnerships that want simplicity over protection. Choose LLP for limited liability and a separate legal identity — almost always the better choice today. Choose a traditional Partnership Firm only if you want the absolute simplest setup and accept unlimited personal liability.
Which is cheaper to register — LLP or Partnership?
LLP starts at ₹10,000 and Partnership starts at ₹8,000 (professional fees, government fees extra at actuals).
Which has lower compliance — LLP or Partnership?
LLP compliance is medium — annual return + statement of accounts. Partnership compliance is low — no mandatory roc filings.
Can LLP raise funding?
LLP: No equity funding (partners only). Partnership: No equity funding.
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