Difference between Proprietorship and LLP

Difference between Proprietorship and LLP

A sole proprietorship, also known as the sole trader, individual entrepreneurship or proprietorship, is a type of enterprise that is owned and run by one person and in which there is no legal distinction between the owner and the business entity.

Here in this article let us understand what is the difference between Proprietorship and an LLP (Limited Liability Partnership).

Difference between Proprietorship and LLP


Sole Proprietorship Limited liability partnership
A type of business organization, in which only one person is the owner as well as the operator of the business is known as Sole Proprietorship. A Limited Liability Partnership (LLP) is a partnership in which some or all partners have limited liability. Therefore, exhibits elements of partnerships and corporations.
The one who runs the business is known as a Sole proprietor or a Sole trader of the business. The partners are the owners of an LLP.
Number of Members
The minimum required member is only 1maximum amount of members are 2 in a Sole proprietorship firm. For Partnership registration, you need a minimum of 2 members and the maximum number of partners can be only 20.
A Sole proprietorship firm has unlimited liability which is carried by the proprietor himself. In a Partnership firm, they have limited liability and are liable only to the extent of their contribution to the LLP.
Profit and Loss
The proprietor is solely responsible for the profits & losses. The Partners are equally responsible for the profits and losses.
In Sole proprietorship the scope for raising capital is limited. There are no shares, shareholders or directors in an LLP. Must have a registered office address in the country of incorporation. LLPs do not pay corporation tax – each LLP member is taxed through Self Assessment as a self-employed individual.
Government regulations
In a sole proprietorship firm, there is no specific registration or statute. LLP is a separate legal entity registered under the LLP Act, 2008. The partners of an LLP are not personally liable for the liabilities of the LLP.


Here in this article, we have understood the difference between Proprietorship firm registration and LLP in India, it will be surely useful for you to grow your business. If you’re wondering for Sole proprietorship company incorporation then you should visit the Online Sole proprietorship registration portal.

Further business accounting needs can be taken care of by EZOTO Software – By Downloading this accounting app you would be able to manage invoice, accounting, credit, inventory, customers, etc and fulfill all your accounting needs.

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