DIFFERENCES BETWEEN A COMPANY AND A PARTNERSHIP FIRM
1.Company is an artificial legal person. Partnership is not a legal person.
2.Company has perpetual succession. Partnership firm does not have perpetual succession.
3.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.
4.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.
5.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.
6.A member is not an agent of company or of other members. Partner is an agent of firm and other partners.
7.Member cannot bind company by his act. Partner can bind firm by his act.
8.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.
9.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.
10.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.
11.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.
12.A single member cannot wind up a company. A partnership may be dissolved by any partner at any time.