8. Capital – There is the limit to the maximum capital a partnership can raise. 19. 2. 1. Legal status – It has a separate legal entity. 12. 14. Management – The shareholders, who supply the capital, cannot as shareholders, manage the affairs of the company. 10. The partners can, by mutual agreement, change them as and when they like. 4. A company has a long existence. All partners are bound by the acts of one partner, 12. Every partner in a partnership firm, on the other hand, carries an implied authority to act for the firm and thus enjoys the right to participate in its management. Governing Legislation – Governed by Companies Act, 2013, 2. 9. Number of persons – Minimum 2 partners and maximum is limited to 20 partners but in case of banking company it is limited to 10 partners. Control by states- Very limited control and regulation. (v) Contracts – In case of partnership, a part­ner cannot contract with his own firm. Privacy Policy3. Stability – The life of a firm is quite un­certain. It cannot become a partner in another firm. 7. (iv) Property of Business – Property of the company does not belong to its members; they cannot use it for personal pur­poses. In a public company the minimum number is 7 and there is no maximum limit set by Law. 13. Number of members – In a private company the min­imum number is 2 and the maximum is 50. Dissolution – Can be done by mutual consent. Audit of Accounts – Under the Companies Act, 1956, audit of the accounts of a company is compulsory. 7. xi. The firm and the partners are one and the same. 11. A partnership has no legal existence apart from the partners. 3. Right from its inception, a company has to comply with numerous and varied statutory requirements. Everything you need to know about the key differences between a partnership firm and a company. Transferability of Ownership – Difficult process for partner to transfer his interest in firm to another person, 10. 2. v. Number of members- For public limited company, minimum number is 7 with no upper limit. 6. Regulation of working – A company has to comply with several legal formalities right from incorporation till it is wound up. Majority Rule – Decisions are taken on the basis of Vote and principles of majority, and. 8. So life of a partnership is short. Audit of Accounts – Audit is compulsory if stated in the Partnership Deed or if Income Tax Act so requires. Distribution of Profits – It depends on the Articles of Association or the Directors as to what share of profits, i.e., dividend (also approved by the shareholders) will be given to the shareholders. The partnership comes to an end by the death, insolvency or insanity of any partner. Legal status – A company gets a separate legal status apart from its members. Transfer of ownership share- Restricted transferability. 11. Formation and regis­tration – Simple agreement between partners is enough to float a firm; no elaborate for­malities to be followed; registration of a firm is not compulsory. 20. 6. Transferability – A member of a company can transfer his share freely to any person except in the case of a private company. Audit of accounts – Accounts and audit of company accounts is compulsory and should be earned out in accord­ance with procedures set by law. Perpetual Existence – Limited life of the firm. They entrust it to the Board of Directors. The death or insolvency of any or all the shareholders does not affect the life of the company, as it is distinct and separate from their lives. Liability – The liability of partners is unlimited. It has a per­sonality of its own, independent of its members. 5. Distribution of profit – All the profits are distributed among partners in the agreed profit sharing ratio. 14. Principle of Agency – Every partner is an agent of the firm. A partnership firm cannot have more than 20 partners. 3. The liability of the partners in a partnership concern is however unlimited and the partners are jointly and severally liable for the debts of the firm. 15. 1. Audit of accounts – Accounts and audit are not required unless the total turnover exceeds Rs.10 lakhs in case of profession­als and Rs. 7. Borrowing Capacity – Ability to borrow is restricted to personal capacity of partners. Content Guidelines 2. Registration – Registration under Indian Companies Act is compulsory. Dissolution – Winding up is a complex process to be followed as per provisions of Companies Act. Majority rule – In a company, the right of the majority to decide is the cardinal rule. 2. All companies are governed by the Companies Act. 1. Number of Members- The minimum number is 2 and maximum is 20 but in the case of a banking business, it is 10. 2. Formation and regis­tration – A company is a creature of law. Before publishing your Articles on this site, please read the following pages: 1. 8. It acts in its own name. Share Your Word File 9. Winding up – A company must adhere to the winding up procedures established by the Companies Act, 1956. i. Formation- By agreement among partners. Share Your PPT File, Learn about the Difference between Partnership Firm and Company, Difference between Partnership Firm and Company, Difference between Partnership Firm and Company: 12 Differences, Difference between a Partnership Firm and a Company: 7 Differences, Difference between a Partnership Firm and a Company: 12 Points, Difference between a Partnership Firm and a Company (with comparison), Difference between a Partnership Firm and a Company: 5 Points, Difference between a Partnership Firm and a Company: 16 Differences, Difference between a Partnership Firm and a Company: 20 Key Differences. Having studied all the forms of business organizations, it is inevitable to draw comparisons between the different forms of business organization. A partnership is an association of two or more persons, who agree to combine their financial resources and managerial abilities to run a business and share profits in an agreed ratio. (iv) Property of Business – The property of the firm is the property of the partners. 5. 6. Number of members – In a public company, minimum number is 7 and there is no limit to maximum number. Maximum Number of persons – 200 in case of private limited company. It comes to an end with the retirement, insanity or death of a partner. Liability of owners – Liability of partners is Unlimited, 9. A partnership is, on the other hand, an association of persons based on mutual agreement among them, and is not compulsorily required to be registered under the relevant Act. 3. 7. There are no statutory requirements in this regard for a partnership firm. Capital – Large amounts of capital can be raised, 17. Legal status – A firm has no legal identity of its own. It possesses separate entity dis­tinct from the members who form it and contribute capital to it. vii. Borrowing Capacity – Can borrow large amounts on the basis, 18. of the large capital contributed by shareholders, 18. 7. Management – Managed and controlled by Board of Directors. Insolvency – Insolvency or death of a partner result in insolvency of partnership. Perpetual Existence – It enjoys continued, perpetual existence. A company enjoys perpetual succession or continuous existence. Audit – Accounts of a company is to be compulsorily audited. 8. Transferability of shares – The shares in a company is transfer­able, with the result that shareholders can go on changing. 40 lakhs in other cases. 3. No limit in case of public limited company. While firms are mainly involved in professional services, companies are involved …

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