| Sr. No. | Particulars | Partnership | LLP | Company |
| 1 | Liability | Every partner is liable jointly with all other partners and also severally for all acts of the firm done while he is a partner | A liability of partner is limited to the extent of his contribution. A partner is personally liable for his own wrongful act i.e. act, which is not authorised by LLP or for fraud on his part | Liability of Shareholders is limited to the extent of his shareholding in the company. |
| 2 | Taxation | 1. Income Tax[30%+3%ED] 2. No Surcharge on IT 3. Profits will be taxed in the hands of partnership Firm and not in the hands of partners. 4. MAT is not applicable. 5. Remuneration of partners will be taxed in the head of “Income from Business or Profession”. | 1. LLPs will be treated at par with partnerships for the purpose of Income Tax [30%+3%ED]. 2. No Surcharge on IT. 3. Profits will be taxed in the hand of LLPs. 4. MAT is not applicable. 5. Remuneration of partners will be taxed in the head of “Income from Business or Profession”. | 1. Effective Tax including ED and Surcharges will be [33.99%] 2. DDT is applicable on distribution of Dividend. 3. MAT is applicable. 5. Directors remuneration is taxable under Salary. |
| 3 | Perpetual Succession | It does not have perpetual succession; death of one partner can dissolve it. | LLP has perpetual succession; it means LLPs may exist even though there are many changes in partners or members. | It has perpetual succession, member may come and go but company does always exist, except some circumstances. |
| 4 | Investment | Partnership is not allowed to invest in other shares of other company or LLP in Firms’ name. | LLP can invest in shares of other company or LLP in its own name. | Company can invest in shares of other company or LLP in its own name. |
| 5 | Legal Proceedings | Only registered Partnership Firm can sue third party or it can be sued. | LLP is a Legal Entity, which can sue or can be sued. | Company is a Legal Entity, which can sue or can be sued. |
| 6 | Bank Finance | Banker does not prefer this form of business due to less protection. | Since registration of charges in this case not available, bankers do not have sufficient protection. | Banker enjoys sufficient protection. |
| 7 | Compliances | There is minimum compliance under Partnership Act. | There are minimum compliances under LLP Act. | Too much compliance under Companies Act. |
| 8 | Information available in Public Domain | Since Balance sheet and Profit & Loss account is not required to be filed with the Registrar of Firms, these information are not available. | Statement of Accounts and Statement of Solvency is required to be filed with ROC within 30 days after end of 6 months form end of financial year. | Annual Accounts, Annual Returns, Various event based forms are required to be filed with ROC. |
| 9 | Related Party Transactions | There no restriction on contracts with related parties. | In LLPs also no such restrictions on these types of contracts | There are restrictions related to Related Party Transactions |
| 10 | Liquidation | Simple Process | Will be done according to provisions of LLP Act, 2008 | Will be done according to provisions of Companies Act, 2013 |
| 11 | Foreign Direct Investment | NRIs/PIO can invest on non repatriation basis subject to conditions. Other than NRIs/PIO required RBI’s permission. | 10th November, 2015, 100% FDI is allowed for business operating in sectors/ activities, where 100% FDI is allowed, through Automatic Route and there is no FDI-linked performance conditions have been prescribed. | The Goverment has allowed 100% FDI in Private Limited and Public Limited Companies through Automatic Route in some Sectors/ operations in which 100 % FDI is allowed through Automatic Route. |
| 12 | Identity of promoters | Identities of promoters are not verified by any Government Agencies. | Designated Partners are required to have DPIN and well identified. | Directors are required to have DPIN and well identified. |
| 13 | Cost of Formation | Least cost of formation up to Rs. 5000/- | Minimum Fees to be paid Rs. 5000/- and professional Fees | High fees as compared to LLPs/ Partnerships |
| 14 | Restriction of having name | There is no restriction in this case. | Name of existing LLP and company cannot be provided. | Name of existing LLP and company cannot be provided. |
| 15 | Confidentiality | All documents and deeds are confidential and not available for outsiders. | LLP Agreement, Incorporation documents, returns etc., are in public domain. | The MOA/AOA, incorporation documents, Annual Accounts, Annual returns, various forms are in public domain. |
| 16 | Registration of Charges | Not required in this case | Not required | Registration, Modification and Satisfaction registration is required. |
