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Basis of Difference
|
Partnership
|
Joint
Stock Company
|
|
a)
Regulation
|
Partnership
Firm is formed under Indian Partnership Act, 1932.
|
A
Joint Stock Company is formed under Indian Companies Act, 1956.
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b)
Number of persons
|
Minimum
number of partners is 2 and maximum 10 in case of banking business and 20 in
other kind of business.
|
Minimum
numbers of members are 7 in case of a public company and there is no limit
for maximum. In a private limited
company minimum number of members is 2 and 50 are maximum.
|
|
c)
Liability
|
Liability
of a Partnership firm is unlimited.
|
Liability
of members is limited to extent of shares held by him.
|
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d)
Management
|
Every
partner can take active part in the management of the firm.
|
Boards
of Directors manage a company.
|
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e)
Auditing
|
Auditing
of books is not compulsory.
|
Auditing
of books is compulsory.
|
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f)
Business
|
A
Partnership firm can do the business as agreed upon by the partners.
|
A
company can do only that business which is stated in Memorandum of
Association.
|
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g)
Separate legal entity
|
A
partnership firm do not have a separate legal entity
|
A
company has a separate legal entity.
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h)
Insolvency
|
Insolvency
of a Partnership firm means insolvency of all partners.
|
Winding
up of a company does not mean insolvency of its members.
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