Basis
of Difference
|
Partnership
|
Joint
Stock Company
|
1. Regulation
|
Partnership Firm
is formed under Indian Partnership Act, 1932.
|
A Joint Stock
Company is formed under Indian Companies Act, 1956.
|
2. 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.
|
3. Liability
|
Liability of a
Partnership firm is unlimited.
|
Liability of
members is limited to extent of shares held by him.
|
4. Management
|
Every partner
can take active part in the management of the firm.
|
Boards of
Directors manage a company.
|
5. Auditing
|
Auditing of
books is not compulsory.
|
Auditing of
books is compulsory.
|
6. 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.
|
7. Separate
legal entity
|
A partnership
firm do not have a separate legal entity
|
A company has a
separate legal entity.
|
8. 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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