Difference between company and partnership

1. (Difference between
Company and
Partnership Firm)

2. A company is an association or collection of
individuals, whether natural persons, legal
persons, or a mixture of both. Company
members share a common purpose and unite in
order to focus their various talents and organize
their collectively available skills or
resources to achieve specific, declared goals.

3. A business organization in which
two or more individuals manage
and operate the business. Both
owners are equally and personally
liable for the debts from the
business.

4. BASIS COMPANY PARTNERSHIP FIRM
LEGALITY Company is an
artificial legal person.
Partnership is not a legal
person.
PERPETUAL SUCCESSIO
N
Company
has perpetual succession.
Partnership firm does not
have perpetual succession.
REGISTRATION Company is created by
registration
under Companies Act.
For a partnership firm
registration is not
compulsory. It is guided by
Indian Contract Act and
Partnership Act.
NUMBER OF MEMBERS Private Limited
Company shall have at
least 2 members and
maximum 50 members.
Partnership firm shall have
at least 2 members and
maximum 20 members and
for banking business,
maximum 10 members.
LIABILITY In a private
limited company, liability of
the members can be
limited by shares or by
guarantee.
Liability of members is
unlimited in a partnership
firm.

5. BASIS COMPANY PARTNERSHIP FIRM
AGENT A member is not an agent of
company or of other members.
Partner is an agent of firm
and other partners.
MANAGEMENT Ordinary members cannot take
part in management of a
company. Only director members
can take part in management.
Partners can take part
in management of a firm.
NO MINIMUM PAID
UP CAPITAL
Private limited company shall
have a minimum paid
up capital of Rupees 1,00,000/-
(Rupees One Lakh Only) and
public limited company of Rs.
5,00,000/- (Rupees Five Lakh
Only).
There is no minimum paid
up capital for a partnership
firm.
DISTINCT ENTITY A company is an entity distinct
from its members. It may
own property, make contracts,
sue and be sued in its own name.
The property of a firm
is owned by the partners.
It can also sue and be sued
in the firm’s name
and partners can also be
sued individually.

6. BASIS COMPANY PARTNERSHIP FIRM
TRANSFER OF SHARES Shares of a private limited
company can be transferred
with ease.
Partner can transfer his
share but the assignee
does not become a partner.
He is only entitled to share
of Profits.
DISSOLUTION A single member cannot
wind up a company.
A partnership may be
dissolved by any partner at
any time.
BINDING BY ACT Member cannot bind
company by his act.
Partner can bind firm by his
act.