A new addition in form of business registration legally in Pakistan is Limited Liability Partnership. The word limited doesn’t mean to be limited scope. It actually limited your legal compliance. Every business man desire to do business with limited liability as it mitigate the risk factor and less legal compliance that save time and energy.
Likewise, other partnership which known by General Partnership in which one partner have unlimited liability which means that in case of bankruptcy. He is liable to pay debt through selling company and his personal assets too.
Comparison with Registered Partnership/Firm with Registrar of Firm
In Every city, there is facility to register Partnership under Partnership Act 1932. The major disadvantage of this registration is not secure firm name while in case of LLP. No one can register company or partnership by that name. Second, liability of one partner is unlimited while in case of LLP all partner are unable to pay dues above than investment. Third Partnership can be dissolved, in case of separation or death of one partner while LLP has distinct characteristic of perpetual succession.
Comparison with Company
Company has double taxation while in case of LLP there is only single taxation. Limited Liability Partnership have same features of Company like limited liability and unlimited life with perpetual succession.