Question
Clarify the different between Partnership /firm and Company.
| No. | Point of difference | Partnership Firm | Company |
| $1.$ | Act to be followed | According to $1932$ Indian Partnership Act. | According to $1958$ Company Act. |
| $2$ | Process of Establishment | Process of establishment of partnership firm id very simple. | Process of establishment of company is very long and expensive. |
| $3.$ | Number of members | There are minimum $2$ and maximum $b20$ partners in ordinary partnership. In banking partnership minimum $2$ and maximum $10$ partners. | In Private company, there are minimum $7$ and maximum member are unlimited. |
| $4.$ | Management | Partner of Partners handle the management. | Management done by Directors as the representatives of shareholders. |
| $5.$ | Keeping of secrets | Partners are limited and as a owner manage the firm. So, secrets are maintained. | Management by directors, who are the representatives of the shareholders and they change every year in turn, so secrets can't be maintained. |
| $6.$ | Capital Proportion | Limited partners, unlimited liabilities, so much capital is not possible. | Huge capital can be collected due to innumerable members. |
| $7.$ | Liability of members | Partners liability is unlimited. | Shareholders liability is limited in respect to their shares only. |
| $8.$ | Registration | Registration of partnership firm is not compulsory but advantageous. | Registration of company is compulsory. |
| $9.$ | Continuity | Partnership ends with death, madness and insolvency. It has limited continuity. | It does not end with a member's death, madness and insolvency; company has separate existence apart from its members. |
| $10.$ | Dissolution | It can be dissolved according to the deed or through court. | No voluntary dissolution. Dissolution in certain conditions by court. |
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