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When two or more people start a business or carry on a trade together to turn a profit, the result can often be a strong union that blends complementary skills, financial resources, customers and connections to help the venture succeed. This is the essence of Partnership.Partnership firms are either registered or unregistered. It is not compulsory to register your partnership firm, although it is advisable to do so.Partnership firms in India are governed by the Indian Partnership Act, 1932.
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A Private Limited Company is a blend of corporate form of business structure and partnership. The most attractive feature of a Private Limited Company is the Limited Liability of its members. It has the flexibility of a partnership firm and the advantages of a Company such as greater stability, better credit worthiness and separate legal entity.
Private Limited Companies are an ideal way of starting and structuring startups with a higher scope of expansion as compared to partnerships as it is easy to raise capital from financial institutions due to its higher stability and reliability.
It is the most successful business type in India.
Limited Liability Partnership has been introduced in India by way of Limited Liability Partnership Act, 2008. It exhibits elements of both partnership and corporation. In LLP, one partner is not responsible or liable for another partner's misconduct or negligence unlike a traditional partnership in which each partner has joint and several liability.
It is easy to incorporate and manage. LLP is more credible and preferable than a normal partnership firm.
LLP form of business is ideal for all classes of entrepreneurs whether it be traders, manufacturers or professionals. A Limited Liability Partnership is a corporate business vehicle that enables entrepreneurial initiative to operate in flexible and efficient manner by providing the benefits of limited liability and allowing its members to organize their internal structure as a partnership.
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