What are the different types of Partnership Firms in India?

Types of Partnership Firms in India

• Limited Liability Partnership
• Based on Partnership Registration Status
• General Partnership

Limited Liability Partnership (LLP) – In this type of partnership, the partners’ liability is limited, and each partner agrees to it. In other words, an LLP is a type of partnership in which each member is responsible for his or her contribution to the company. The personal property of a partner cannot be attached to repay the firm’s liabilities in this type of partnership.

Based on Partnership Registration Status – The Partnership Act does not require a partnership entity to be registered. Firms that are both registered and unregistered are lawful and authorized by the law.

• Registered Partnership Firm: The Partnership Firm must register with the Registrar of Firms (RoF) in the jurisdiction where the firm conducts business. The registration application required payment of a registration fee to RoF, which differed by state and was determined by state law.
• Unregistered Partnership Firm: An unregistered partnership firm is formed by the partners signing an agreement. The unregistered partnership firm permits the partners to conduct business in the manner specified in the agreement.

General partnership – Each partner in this sort of partnership has the authority to make decisions concerning the firm’s operations and management. The disadvantage is that the partner’s liability is unlimited, and in the event of a financial miscalculation or loss caused by a single partner’s actions, all of the partners’ personal assets can be taken away to pay off debts and creditors’ claims.