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Difference between Limited Liability Partnership and General Partnership,LLP v/s General Partnership Video Lecture - Commerce

FAQs on Difference between Limited Liability Partnership and General Partnership,LLP v/s General Partnership Video Lecture - Commerce

1. What is the difference between a Limited Liability Partnership and a General Partnership?

Ans. A Limited Liability Partnership (LLP) and a General Partnership are both types of business structures, but they differ in terms of liability and management. In a General Partnership, all partners have unlimited liability for the partnership's debts and obligations. This means that if the partnership cannot meet its obligations, the partners' personal assets can be used to satisfy those debts. On the other hand, in an LLP, partners have limited liability, which means that their personal assets are generally protected from the partnership's liabilities. Additionally, an LLP allows for more flexible management structures and provides partners with some protection from the actions of other partners.

2. How is an LLP different from a General Partnership in terms of tax obligations?

Ans. In terms of tax obligations, an LLP and a General Partnership are similar. Both are pass-through entities, which means that the profits and losses of the partnership are passed through to the partners, who then report them on their individual tax returns. The partnership itself does not pay income tax. However, it is important to note that tax laws may vary depending on the jurisdiction, so it is advisable to consult with a tax professional to understand the specific tax obligations of an LLP or General Partnership in a particular country or state.

3. Can an LLP convert into a General Partnership or vice versa?

Ans. Yes, it is possible for an LLP to convert into a General Partnership and vice versa, depending on the laws and regulations of the jurisdiction in which the business operates. However, the process and requirements for conversion may vary. In some cases, a formal application or filing may be required with the appropriate government agency, while in others, a simple agreement among the partners may be sufficient. It is important to consult with legal professionals or business advisors to understand the specific requirements for conversion in a particular jurisdiction.

4. Are there any restrictions on the types of businesses that can be formed as an LLP or General Partnership?

Ans. Generally, both LLPs and General Partnerships can be formed by any type of business, including professional service firms, such as law firms, accounting firms, and consulting firms. However, there may be certain restrictions or regulations imposed by specific industries or professional bodies. For example, some jurisdictions may require certain professionals, such as doctors or architects, to form specific types of partnerships that are regulated by their respective governing bodies. It is important to research and comply with any industry-specific requirements when forming an LLP or General Partnership.

5. Can an LLP or General Partnership have more than two partners?

Ans. Yes, both LLPs and General Partnerships can have more than two partners. There is no specific limit on the number of partners in either structure. The number of partners can vary depending on the needs and goals of the business. However, it is important to note that as the number of partners increases, the complexity of managing the partnership may also increase. It is advisable for partners to have clear agreements and structures in place to ensure effective decision-making and management of the partnership as the number of partners grows.

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Oct 10, 2025 Last updated

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LLP v/s General Partnership Video Lecture - Commerce

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LLP v/s General Partnership Video Lecture - Commerce

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