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Compilation of Differences between Partnership Firm, Limited Liability Partnership
(LLP), Private Limited Company and One Person Company [OPC]
S. Limited Liability
Particulars Partnership Firm Private Limited Company One Person Company
No. Partnership
1. Statute It is governed by "The It is governed by "The Limited It is governed by "The Companies It is governed by "The
Indian Partnership Act, Liability Partnership Act, Act, 2013”. Companies Act, 2013”
1932." 2008".
2. Regulated by This is regulated by the This is regulated by the This is regulated by the Registrar This is regulated by the
Registrar of Firms of the Registrar of Companies of the of Companies of the Central Registrar of Companies of
State Government. Central Government. Government. the Central Government.
3. Creation Created by Contract Created by Law Created by Law Created by Law

4. Registration The registration is Not The registration is Mandatory. The registration is Mandatory. The registration is Mandatory.
formalities Mandatory.
5. Incorporation Partnership Deed is the Limited liability partnership Memorandum of Association and Memorandum of Association
documents main incorporation agreement is the main Articles of Association are the main and Articles of Association are
document. incorporation document. incorporation documents. the main incorporation
documents.
6. Separate Legal It is not a separate legal It is a separate legal entity, It is a separate legal entity, It is a separate legal entity,
Entity entity from partners. separate from its partners\ separate from its member, separate from its member,
Partners are collectively designated partners. directors. directors.
referred as firm
7. Perpetual It does not have perpetual It has perpetual succession. It has perpetual succession. It has perpetual succession.
Succession succession.

8. Change in Change of registered office Change of registered office from Change of registered office from Change of registered office
registered office from one state to another one state to another state is one state to another state is from one state to another state
state is easily allowed. allowed with some allowed with lot of formalities. is allowed with lot of
formalities. formalities.
9. Number of Minimum two partners and Minimum two partners and Shareholders: Minimum Two and Shareholders: Only One
Partners / maximum twenty partners maximum limit is not maximum Two Hundred Shareholder.
Shareholders are included. specified. members.

 
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10. Maintenance of Accounts are maintained as Accounts are required to be Maintenance of accounts and audit Maintenance of accounts and
Accounts and per partnership deed. audited if the turnover are Compulsory. audit are Compulsory.
Audit exceeds Rs.40 Lakhs or
contribution exceeds Rs.25
Lakhs.
11. Filing of Annual Filing of Annual Return is Filing of Annual Return is Filing of Financials is compulsory, Filing of Financials is
Return and not compulsory. compulsory within 60 days within 30 days from the date of compulsory, within 30 days
Financials from the close of the financial Annual General Meeting. from the date of Annual
year. General Meeting.
Filing of Annual Return is
Accounts and Solvency to be compulsory, within 60 days from Filing of Annual Return is
filed within 30 days from the the date of Annual General compulsory, within 60 days
end of six months of the Meeting. from the date of Annual
financial year to which the General Meeting.
Statement of Account and
Solvency relates
12. Liability of Liability of partners is Liability of partners is Limited Liability of members is Limited to Liability of member is Limited
Partners Unlimited in all the cases. to Capital Contribution in all Capital of the company. to Capital of the company.
cases except ‘deliberate fraud’.
13. Admission of Minor can be admitted to Minor cannot be admitted either Minor cannot be appointed as a Minor cannot be appointed as a
minor as the partnership for the as a Partner/Designated partner Director, Legal Guardian can Director, and also as the Sole
participants benefits only. in the LLP. hold the shares on behalf of the Shareholder.
minor.
14. Common seal Common Seal is not Common Seal is required. Common Seal is required. Common Seal is required. 
required.
15. Suit against and A registered firm can sue A LLP can always sue and can be A private company can always sue A OPC private company can
by and can be sued in its' own sued in its own name. and can be sued in its own name. always sue and can be sued in
name. its own name.
16. Management/ Management is done by the Management is done by Management is done by Management is done by
Directors working partners. Designated Partners. Board of Directors. Board of Director(s).
(Minimum 1) (Minimum 2) (Minimum 2 and maximum 15) (Minimum 1 and maximum 15)

 
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17. Director Partnership Firm doesn’t Each designated Partner Each Director requires to have a Each Director requires to have
Identification require any of this. requires having a DPIN before unique DIN before being appointed a unique DIN before being
Number/ being appointed as a Designated as a Director of Private Company. appointed as a Director of OPC
Partner of LLP. Private Company.
18. Income of the The income of the The income of the Limited The income of the private company The income of the OPC private
Entity partnership firm is assessed Liability firm is assessed as a is assessed as a separate and company is assessed as a
as a separate and distinct separate and distinct entity distinct entity under the Income separate and distinct entity
entity under the Income Tax under the Income Act, 1961 Tax Act, 1961 under the Income Tax Act,
Act, 1961 1961
19. Interest on Interest on capital is Interest on capital is allowable Interest on capital is not allowed Interest on capital is not
Capital allowable as deduction in as deduction in the hands of as deduction. allowed as deduction.
contribution by the hands of registered firm LLP subject to limits.
participants subject to limits.
20. Management Management remuneration Management remuneration is Management remuneration is Management remuneration is
remuneration is allowable as deduction allowable as deduction in the allowable as deduction in the allowable as deduction in
in the hands of registered hands of registered firm subject hands of private company and the hands of private company
firm subject to limits. to limits. there is no limit specified. and there is no limit specified.
21. Distribution of  No tax is to be paid on  No tax is to be paid on the  Private company has to pay  OPC Private company has
profit the distribution of profit distribution of profit by the dividend distribution tax on to pay dividend distribution
by the partnership firm. LLP. dividend. tax on dividend.
 Profit is exempt in the  Profit is exempt in the hands  Profit is exempt in the hands of  Profit is exempt in the
hands of partners. of partners. shareholder. hands of shareholder.
22. Purchase of Firm cannot purchase LLP can purchase movable/ Private company can purchase OPC Private company can
property movable/ immovable immovable property in its movable/ immovable property in purchase movable/
property in its name. name. its name. immovable property in its
name.
23. Loans and It is not taxable. It is not taxable. Except in the It is taxable as deemed dividend It is taxable as deemed
advances by the case of private company u/s 2(22)(e) of the dividend u/s 2(22)(e) of the
entity to the converted into LLP for the first Income Tax Act, 1961, if certain Income Tax Act, 1961, if
participants three years after conversion. conditions are met. certain conditions are met.
24. Nomenclature NA Name to contain ‘Limited Name to contain ‘Private Limited’ Name to contain ‘Private
Liability Partnership’ or ‘LLP’ as suffix Limited (OPC)’ as suffix
as suffix

 
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25. Change of Name The name of the Partnership The name of the LLP can be The name of the company can be The name of the company can
Firm can be changed. changed with the prior approval changed with the prior approval of be changed with the prior
of Central Government. Central Government. approval of Central
Government.
26. Meetings of As per the Partnership As per the terms mentioned in Board Meetings and General Board Meetings are mandatory
Partners/Directo Agreement the LLP Agreement. Meetings are compulsory. but convening of Annual
rs/Shareholders General meeting is not
compulsory.

Board Meetings: Board Meetings:

First Board meeting: within 30 First Board meeting: within

days from the date of 30 days from the date of
incorporation. incorporation.

Subsequent Board meetings: Subsequent Board

Minimum number of four meetings,
every year, with a gap of not more
than 120 days between two
consecutive meetings of the Board.
Annual General Meetings:
Meetings: a minimum of one
Board meeting in each half of a
calendar year and the gap
between the two meetings is
not less than ninety days.

1st AGM: 9 months from the close

of financial year.

Subsequent AGM: 6 months from

the close of financial year.
27. Quorum for No such requirement As per the LLP Agreement In case of Board meetings: 1/3rd In case of Board meetings:
meetings of the total directors, subject to a 1/3rd of the total directors,
minimum of 2 Directors. subject to a minimum of 2
Directors, if there is more than

 
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In case of General Meetings: Two one Director.
Shareholders physically present
In case of one Director, then
the sole director will be the
quorum.
28. Foreign Direct NRI/PIO may invest in the FDI in LLP is allowed in such FDI in a Private Company is FDI is not allowed, as it is the
investment [FDI] firm without repatriation sectors/activities, where 100% allowed based on sector specific requirement for a member of a
in the form of benefits, no permission from FDI is allowed under automatic restrictions i.e., either percentage OPC to be a Indian citizen and
capital/contribut RBI is required. route, without any FDI-linked or based on Automatic or prior resident in India shall be
ion/equity. performance related conditions. approval route. eligible to incorporate a One
In case the investment to be Person Company i.e., shall be
made by NRI/PIO with Even such entry is subject to Further FDI in certain sectors have a member of the OPC.
repatriation benefits, then prior Government / FIPB FDI-linked performance related
prior permission needs to be approval. conditions, which are to be
obtained from RBI. complied.

In case the investment to be FDI is not allowed in:

made by non-resident other
than NRI/PIO with (a) Sectors with less than 100
repatriation benefits, then % FDI under automatic route,
prior approval from to be
obtained. (b) Sectors with Approval route,
activities such as
Agricultural/plantation and Print
media and Sectors in which FDI
is prohibited

Disclaimer: SBS AND COMPANY LLP does not endorse any of the content/opinion contained in any of the articles above (Compilation of Differences between
Partnership Firm, Limited Liability Partnership, Private Limited Company and One Person Company [OPC]), and shall not be responsible for any loss whatsoever
sustained by any person who relies on the same.

 
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