Difference between  Partnership firm  and Company

Basic of Difference Partnership Firm Company


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.