| PARTNERSHIP |
COMPANY |
|
| 1.Definition | Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them
acting for all. |
A Company means a company formed and registered under this Act or an exiting Company. |
| 2.A Legal
Person |
A firm is not a legal Entity. | A Company on the other hand , is a Legal
Person. |
| 3. Liability | In a Partnership, the liability of partners is unlimited. | In case of a company, which is limited, the liability of the members is limited to the
extent of its share capital. |
| 4.Transfer of
Shares |
In a firm, a partner cannot transfer or assign the whole of his share without the consent
of all the partners of the firm |
In a company, a shareholder can transfer his share subject to the provisions of the
Articles of the Company. |
| 5.Mutual
Agents |
In a firm, all partners are mutual agents. | In a company, a member is not an agent of
the other member. |
| 6.Registration | Registration of a firm is not compulsory
under the Partnership Act, 1932. |
Registration of a company is compulsory
under the Companies Act, 1956. |
| 7.Management | Management vests in the hands of the
Partners except in the case of Sleeping Partners. |
Management vests in the board of Directors, elected periodically by the shareholders. |
| 8.Creditors | Creditors of firm are also creditors of the partners individually as well. | Creditors are only the creditors of the company and not of the individual
shareholders. |
| 9.Statutory
obligations |
A partnership has less statutory obligations | A company is strictly regulated under the
Companies Act, 1956. |
| 10.Accounts | Accounts of a partnership firm need not be
audited by the auditor. |
Accounts of a company must be audited by
an auditor. |
| 11.To whom property
belong. |
The property of affirm belongs collectively to the partners. | The property of a company, on the other hand, belongs to the company, and not to
the shareholders. |
| 12.Effect of death of partners and
members |
In the case of a firm, death or insolvency of a partner resolution the dissolution of the firm, unless there is a contract to the
contrary. |
In the case of a company, death or insolvency of a member of the company does not result in the dissolution of the
company. |
| 13.Contract with the firm or company | A Partner cannot enter into a contract with the firm, in which he is a partner, because the firm is not a legal person. | A shareholder, on the other hand, can enter into a contract with the company, of which he is a member, because the company is a
legal person. |
| 14.Power to dispose of
property |
A partner can dispose of the property of the firm. | A Shareholder cannot dispose of the property of the company. |
| 15.Effect of Restrictions on authority | In a partnership firm, when restrictions are imposed on the authority of a partner, they are of no avail against third person who has
no knowledge of it. |
In the case of a company, the restrictions of a company are absolutely valid, because the memorandum and articles of company serve
as a public notice. |
| 16.Limit on number of members | In the case of a firm, the number of partners must not exceed 10 for carrying on banking business and 20 for any other business. | In the case of a company, a Private Company : Minimum 2 and Maximum 50 and in case of Public Company : Minimum
7 and Maximum unlimited. |
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