Differentiate between Partnership & LLP.

(1) Unlimited Liability: On account of unlimited liability, the partners in the business are liable for all of its debts. This means that if, for whatever reason, a partner is unable to repay a bank loan or is liable to pay a fine, this can be recovered from his or her personal possessions. So, the bank, institution or supplier would have right to their jewellery, house or car. Furthermore, aside from ease of set-up and minimal compliance, the partnership offers no benefits over the LLP. If one opts to register it, which is optional, it may not even be cheaper. Therefore, unless one is running a very tiny business, one should not opt for a partnership. (2) Easy to Start: If one chooses not to register the partnership firm, all that is needed to get started is a partnership deed. As compared with a LLP, the procedure for starting-up a partnership firm is much simpler. (3) Relatively Inexpensive: A General Partnership is cheaper to start than an LLP and even over the long-term, due to the minimal compliance requirements, is inexpensive. One need not to hire an auditor. This is why, despite its short comings, home businesses may opt for it.