Difference between Limited Liability Partnership incorporated under Limited Liability

Two groups of friends open identical cafes on the same street in Panvel. One group registered a partnership firm; the other registered an LLP. A supplier delivers coffee beans worth ten lakh rupees to each and is not paid. In which case can he go after the owners' personal savings, and in which case is he stuck with the café's own assets? The answer is the heart of the syllabus item that compares an LLP under the LLP Act 2008 with a partnership firm under the Indian Partnership Act 1932. This topic takes the outsider's point of view: what is the entity, and who pays when it cannot.

In two minutes

Seen from outside, an LLP is a separate legal person whose debts are its own and whose partners are not personally liable merely for being partners, while a firm is the partners collectively and each partner is liable jointly and severally for the firm's acts.

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