|1.Definition||Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them
acting for all.
|A Company means a company formed and registered under this Act or an exiting Company.|
|A firm is not a legal Entity.||A Company on the other hand , is a Legal
|3. Liability||In a Partnership, the liability of partners is unlimited.||In case of a company, which is limited, the liability of the members is limited to the
extent of its share capital.
|In a firm, a partner cannot transfer or assign the whole of his share without the consent
of all the partners of the firm
|In a company, a shareholder can transfer his share subject to the provisions of the
Articles of the Company.
|In a firm, all partners are mutual agents.||In a company, a member is not an agent of
the other member.
|6.Registration||Registration of a firm is not compulsory
under the Partnership Act, 1932.
|Registration of a company is compulsory
under the Companies Act, 1956.
|7.Management||Management vests in the hands of the
Partners except in the case of Sleeping
|Management vests in the board of Directors, elected periodically by the shareholders.|
|8.Creditors||Creditors of firm are also creditors of the partners individually as well.||Creditors are only the creditors of the company and not of the individual
|A partnership has less statutory obligations||A company is strictly regulated under the
Companies Act, 1956.
|10.Accounts||Accounts of a partnership firm need not be
audited by the auditor.
|Accounts of a company must be audited by
|11.To whom property
|The property of affirm belongs collectively to the partners.||The property of a company, on the other hand, belongs to the company, and not to
|12.Effect of death of partners and
|In the case of a firm, death or insolvency of a partner resolution the dissolution of the firm, unless there is a contract to the
|In the case of a company, death or insolvency of a member of the company does not result in the dissolution of the
|13.Contract with the firm or company||A Partner cannot enter into a contract with the firm, in which he is a partner, because the firm is not a legal person.||A shareholder, on the other hand, can enter into a contract with the company, of which he is a member, because the company is a
|14.Power to dispose of
|A partner can dispose of the property of the firm.||A Shareholder cannot dispose of the property of the company.|
|15.Effect of Restrictions on authority||In a partnership firm, when restrictions are imposed on the authority of a partner, they are of no avail against third person who has
no knowledge of it.
|In the case of a company, the restrictions of a company are absolutely valid, because the memorandum and articles of company serve
as a public notice.
|16.Limit on number of members||In the case of a firm, the number of partners must not exceed 10 for carrying on banking business and 20 for any other business.||In the case of a company, a Private Company : Minimum 2 and Maximum 50 and in case of Public Company : Minimum
7 and Maximum unlimited.
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