VS
Both are partnerships. LLP gives limited liability + corporate registration. Traditional partnership has unlimited personal liability but lower compliance.
Pick Partnership Firm when
You're a small family firm with full mutual trust
Annual turnover below ₹40 lakh
You want lowest cost + state-level registration
Your business has minimal liability exposure
Pick LLP when
Multi-state operations or higher turnover
You want limited liability for personal asset protection
You may add more partners over time
You want corporate-grade registration with MCA
Feature
Partnership Firm
LLP
Governing Act
Indian Partnership Act 1932
LLP Act 2008
Registration body
State Registrar of Firms
MCA (Central)
Limited liability
No (personal assets exposed)
Yes
Setup cost
₹3,499
₹5,999
Setup time
5-7 days
10-15 days
Annual compliance
Minimal (no MCA filings)
Form 11 + Form 8 + ITR
Audit
Tax audit if turnover > ₹1cr
Statutory above ₹40L turnover OR ₹25L contribution
Tax rate
30% flat
30% flat
Conversion to Pvt Ltd
Possible (URC-1)
Easier (URC-1)
Not strictly — but unregistered partnerships cannot sue third parties or partners. We always recommend registering.
Yes — Form 17 + Form 2 with MCA. FilingLab handles end-to-end conversion for ₹4,999 + govt fees.
Ready to register?