Armor for party members

So I saw a post of people discussing the armor they put on their companions and some people said they Just leave their normal outfit. I am not and Expert of the game but i like It a lot (i am restarting It again even if i havent finished it because now I kinda get how classes work). My question is, Is It okay to not upgrade the party members armor? Or there are Just stronger versions of the base outfits?