Your Trusted Partner for Seamless Business Incorporation
A Partnership Firm is a business structure where two or more individuals come together to run a business and share its profits in a pre-agreed ratio. Governed by the Indian Partnership Act, 1932, this structure is simple, flexible, and ideal for small to medium-sized businesses with trust-based operations.
Create a detailed agreement outlining the profit-sharing ratio, responsibilities, and terms.
Submit the deed to the Registrar of Firms along with required documents.
Register for GST if your firm is liable under the GST Act.
Open a current account in the firm's name for business transactions.
This table provides a comprehensive comparison of major business structures in India to help you choose the most suitable one for your needs.
Feature | LLP | Private Limited Company | Partnership Firm | Sole Proprietorship | One Person Company (OPC) |
---|---|---|---|---|---|
Legal Entity | Separate Legal Entity | Separate Legal Entity | Not a Separate Legal Entity | Not a Separate Legal Entity | Separate Legal Entity |
Liability | Limited Liability | Limited Liability | Unlimited Liability | Unlimited Liability | Limited Liability |
Minimum Partners/Directors | 2 Partners | 2 Directors | 2 Partners | 1 Proprietor | 1 Director |
Income Tax Rates | 30% + applicable surcharge and cess | 22% (optional) or 25% for turnover under ₹400 Cr | 30% + surcharge and cess (as per slab) | Taxed as per individual income tax slabs | 22% (optional) or 25% for turnover under ₹400 Cr |
Compliance | Low | High | Minimal | Very Minimal | Moderate |
Audit Requirement | Required for large LLPs | Mandatory | Required if turnover exceeds ₹50 lakhs | Not Required | Mandatory |
Equity Fundraising | Not Allowed | Allowed | Not Allowed | Not Allowed | Not Allowed |
Key Advantages |
|
|
|
|
|
Regulating Act | Limited Liability Partnership Act, 2008 | Companies Act, 2013 | Indian Partnership Act, 1932 | No specific law | Companies Act, 2013 |
Perpetual Succession | Yes | Yes | No (depends on partners) | No (depends on proprietor) | Yes |
Ownership | Owned by Partners | Owned by Shareholders | Owned by Partners | Sole Proprietor has full ownership | Owned by a Single Shareholder |
Decision-Making Authority | Partners jointly | Board of Directors | Partners jointly | Proprietor | Single Director |
Formation Cost | Moderate | High | Low | Minimal | Moderate |
Ideal For | Professional services and SMEs | Startups and growth-focused businesses | Small businesses with trust-based operations | Individual-run businesses | Solo entrepreneurs wanting corporate benefits |
Funding Options | Internal and debt funding | Equity, debt, and venture capital funding | Internal funding only | Personal capital or loans | Personal capital or debt funding |
Business Credibility | Moderate | High | Low | Low | Moderate |
Transfer of Ownership | Allowed with partner consent | Easy via share transfer | Not allowed easily | Not applicable (sole ownership) | Limited transfer to a nominee |
Employee Benefits | Limited options | Comprehensive options (PF, ESIC) | Limited options | Not applicable | Limited options |
Let us assist you with seamless registration and compliance management for your partnership firm.
Contact Us