Limited Liability Partnership (LLP) is a relatively new form of business entity that was formed to overcome the limitations of the existing forms of business entity mainly, Partnership and Company. The need for LLP grew as small business owners who usually started off with the Partnership form of business had to bear unlimited liability despite their meager means. Thus, Limited Liability Partnership (LLP) provided the much needed respite by combining the best of both worlds. By drawing its characteristics from both the partnership and the company form, it is slowly catching up to be a popular way of organising the business. Following are the difference between LLP and Partnership Firm.
Difference between LLP and Partnership Firm
|Independent Entity||It has an entity separate from its owners.||It does not have a separate entity.|
|Number of Partners||No maximum limit but minimum shall be two.||Maximum: 50|
|Governing Law||The Limited Liability Partnership Act, 2008||Indian Partnership Act, 1932|
|Registration of the Firm||Registration mandatory with the Registrar of Companies (Roc)||Not mandatory|
|Liability of the|
|Limited to the extent of their contribution to the firm.||Unlimited meaning their personal property can be used for paying off the firm’s liability.|
|It has a perpetual existence and is not affected by the death, admission, exit or retirement of partners.||It does not have a perpetual existence.|
|Body Corporate As a Partner||Can be admitted as a partner.||Cannot be admitted as a partner|
|Who owns the assets?||Assets of the firm are owned by the LLP and not the partners.||Assets of the firm are owned by the partners and not the firm.|
The balance sheet is the last financial statement that is prepared by any organization. This statement helps to ascertain the true financial position of an enterprise at the end of an accounting period
Profit and Loss Account
A profit and Loss Account is the second financial statement prepared by an organization. This account is prepared to ascertain the net results of a firm in form of net profit earned or net loss incurred during an accounting period.
Accounting software is an integral part of the computerized accounting system. The accounting software should be selected after considering the level of skill and proficiency of the accounting professionals.
What are Accounting Reports?
Accounting Reports: When the collected data is processed and manipulated in a useful sense that can be understood by the users without any ambiguity, then it becomes information.
Transaction Processing System
Transaction Processing System (TPS) refers to a computerized system that records, processes, validates, and stores routine transactions that occur in various functional areas of a business on daily basis.