| Points of difference | Partnership firm | Company |
| 1. Process of establishing | Easy establishment. Registration is voluntary. It does not have a separate legal entity. | Lengthy and complicated establishment process. Registration is compulsory. It has a separate legal |
| 2. Number of members | Minimum 2 members and maximum 10 for a banking firm and maximum 20 for any other firm. | Minimum 7 members and maximum unlimited members for a public company. Minimum 2 and maximum 200 for a private company. |
| 3. Capital | Can raise less capital. | Can raise very large capital. |
| 4. Transfer of part or interest | Partner cannot transfer his part or interest without consent of other partners. | In a public company, members can freely and easily transfer their shares. In a private company there are certain restrictions for transfer. |
| 5. Liability | Partners have unlimited liability. | Members i.e. shareholders are liable only upto the face value of number of shares they hold. |
| 6. Management | Partners themselves manage the firm. | Share-holders elect directors through voting who then manage the company. |
| 7. Life | The partnership dissolves in case a partner dies, wishes to quit, becomes insane, or becomes insolvent. Thus, life of partnership firm is short. | Existence of company does not come to an end in case of death, insolvency or insanity of member. Thus, life of a company is almost perpetual. |
| 8. Maintaining secrets | The partners can maintain business secrets among themselves. | Difficult to maintain secrets. |
| 9. Flexibility | Partnership firm is quite flexible. | Company is not as flexible as a partnership firm. |
| 10. Personal contact | Partners can maintain direct contact with employees and customers. | This is not possible in company (Though it is possible in small private companies.) |
| 11. Winding-up | A partnership firm can wind up easily as per the contact or situations either with the help of law or consent of partners. | It is quite a lengthy and legal process to wind-up a company. It can be done only using lawful procedures. |
