What Are Key Differences Between A Partnership Firm And A Company?

1.	What Are Key Differences Between A Partnership Firm And A Company?
Answer» Registration is not compulsory under Indian Partnership Act, 1932 whereas COMPANY comes into EXISTENCE after the registration under Companies Act, 1956. In the case of partnership firm the number of members must not exceed 20 in any business and MINIMUM is 2 whereas in a private limited company minimum is 2 and maximum is 50 and in public limited company minimum 7 and no maximum limit. Partnership firm do not have an independent legal POSITION or status whereas company is independent legal status. In partnership firm partners have unlimited liability whereas liability of shareholders is limited to the amount of the shares they hold. In partnership firm transfer of interest is not transferable without consent of other partners whereas in a company shares are freely transferable without consent of other members. Audit is not mandatory for a partnership firm whereas accounts of a company must be audited annually. In a partnership firm stability of business is not affected by death or insolvency of PARTNER whereas in the case of a company shareholder's death or insolvency would not affect the constitution of the company.

Answer»

Registration is not compulsory under Indian Partnership Act, 1932 whereas COMPANY comes into EXISTENCE after the registration under Companies Act, 1956.
In the case of partnership firm the number of members must not exceed 20 in any business and MINIMUM is 2 whereas in a private limited company minimum is 2 and maximum is 50 and in public limited company minimum 7 and no maximum limit.
Partnership firm do not have an independent legal POSITION or status whereas company is independent legal status.
In partnership firm partners have unlimited liability whereas liability of shareholders is limited to the amount of the shares they hold.
In partnership firm transfer of interest is not transferable without consent of other partners whereas in a company shares are freely transferable without consent of other members.
Audit is not mandatory for a partnership firm whereas accounts of a company must be audited annually.
In a partnership firm stability of business is not affected by death or insolvency of PARTNER whereas in the case of a company shareholder's death or insolvency would not affect the constitution of the company.

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