Difference between Partnership firm and Company
Basic of Difference | Partnership Firm | Company |
Definition
|
It is a contract between two or more persons are agreed to share profits/losses, ownership, responsibilities, and duties. | A company is a legal entity formed by a group of individuals to engage in and operate a business enterprise in a commercial or industrial capacity. |
Governed by | It is regulated by the Partnership Act, 1932. | It is regulated by the Companies Act, 2013. |
Registration | Not compulsory. | It must be compulsory by the registrar. |
Member | All Members are known as partner. | All members known as shareholder. |
No. of member | Minimum no. of partner is 2 or maximum is 50. | Private company – minimum is 2 or maximum limit 200
Public company- minimum is 7 & no limit for maximum. |
Document | Partnership deed is most important. | Memorandum of Association(MOA),
Articles of Assoiciation(AOA) are most important. |
Liability | Unlimited. | The liabilities of shareholders are limited to the value of shares held by them. But in the case of companies with unlimited liability, the shareholders possess unlimited liability. |
Audit | The Books of account is not mandatory. | The Books of account is mandatory. |
Transfer of share | It can’t transfer without the consent of another partner. | It has no restricted expect the private company. |
Common seal | It doesn’t require any common seal. | It requires common seal or stamp for legal and functional purposes. |
Minimum capital | No such capital. | Private company-minimum 1lakhs
Public company-minimum of 5lakhs. |