In Malaysia, there are two types of partnerships, which are general partnerships and limited liability partnerships (LLP). Although both of them are in the same category of partnerships and they do share some similarities, there are quite a lot of differences between them too. Before deciding on the type of partnership you want to establish, you may seek advice from a company incorporation service in Johor Bahru and let the professionals provide you with some insights about the type of partnership that suits you the best. Now, let us have a look at their differences.

In general partnerships, the partners can decide on its trade name, and they need to get approval from the ROB for the proposed name. On the other hand, the liability limited partnerships will have the word “PLT” behind its name. A general partnership can have two to twenty partners while a limited liability company will have at least two partners, and there is no limit on the number of partners. Besides, a limited (Also see What are the Types of Company Limited by Guarantee?) liability partnership needs a compliance officer or one of the partners, while a general partnership does not require anyone to hold such an office.

One of the most significant differences between a general partnership and a limited liability partnership is that the partners that own the former will have unlimited liability while the owners of the latter do not. Having unlimited liability means that the liability may extend to the personal assets (Also see Guide to Operating Assets) that the partners own. On the contrary, the partners that run a limited liability company (Also see Does Your Company Prepare Accounts Receivable Aging Report?) will not be affected by the liability of the business. The liabilities which are related to the business that the partners need to bear are only to the extent of the unpaid share capital.

A general partnership does not need to conduct audits, while having audits is not compulsory in a limited liability partnership too, except if the partnership agreement has stated the requirement to do so. The rules and regulations that govern the general partnership is the Registration of Business Act 1956. Conversely, the limited liability partnerships need to comply with the Limited Liability Partnerships Act 2012 and the Limited (Also see Introduction to Limited Assurance Engagement) Liability Partnership Regulations 2012.