Difference Between Partnership And Company

In the realm of business management, the phrases partnership and company are frequently employed. The purpose of this piece is to clarify the distinction between a company and a partnership.

Partnership: About

• A partnership firm is a particular kind of business entity where two or more people work together as partners to run a company. In addition to having a vote in the administration and day-to-day operations of the company, the partners split the profits and losses. 
• Although partnerships can be a flexible type of corporate organization and are relatively straightforward to set up, partners in a partnership have limitless personal liability for the obligations of the business.

Company: About

• A company is an independent legal body that exists independently of its owners. It can possess property under its own name, enter into contracts, and file or defend lawsuits. 
• Companies can be established for a number of reasons, such as government bodies, non-profit organizations, and for-profit enterprises.

Partnership: Features

• A partnership firm may consist of two partners at a minimum and up to twenty partners at most. The partnership agreement needs to specify the number of partners in detail.
• Partners in a partnership are held individually accountable for the debts and liabilities of the partnership. This implies that the partners’ personal assets may be utilized to settle obligations if the partnership has no way to pay them.
• Partnership firms provide flexibility when it comes to decision-making and management, and they are comparatively simple to set up and run.
• A partnership firm may be dissolved by consent of all partners or by passing away, becoming incapacitated, or leaving the company.
• The terms and conditions of a partnership are outlined in a partnership deed, which also specifies how profits and losses are to be split as well as how the partnership might be dissolved. It is a document that every partnership firm needs to have.

Company: Features

• A company can engage in contracts, possess real estate and assets, and hold itself accountable for its conduct since it is a different legal entity from its stockholders.
• A company’s eternal existence means that, despite changes in its stockholders, it will always exist until it is dissolved.
• Companies are formally organized into executives and a board of directors. They must keep up-to-date financial records and host annual general meetings (AGMs).
• Because the company’s assets are distinct from those of its owners, in the case of the company’s failure, the personal assets of the shareholders are safeguarded.

Difference Between: Partnership vs Company

PARTNERSHIP	COMPANY
There are partners in a partnership firm.	There are stakeholders in the company.
Indian Partnership Act of 1932 governs the partnership’s operations.	Indian Companies Act of 2013 governs the company’s operations.
It is established by contracts.	It is established by laws.
It is created when two or more individuals sign a contract.	A company is founded by law, by registration.
A partnership must be registered with the state government.	The federal government sets the rules for a company.
A Partnership registration is not required.	A company’s registration is required.
For a partnership firm, a deed of partnership is necessary.	Memorandum of association as well as articles of association are required documents in the case of a company.
It is not a separate legal entity.	It is a separate legal entity.
Partners possess unlimited liability.	Shareholders possess limited liability.
A Stamp is not necessary.	A Stamp is necessary.
The active partners are in charge of the management.	Management is under the direction of the board of directors.
A decree against a partnership firm cannot be enforced against its partners.	A company’s shareholders may be subject to an order against them.
A partnership firm must maintain accounts in accordance with the terms specified in the partnership deed.	A company needs to keep accounts and have an accredited chartered accountant audit them.
It is simple for the partners to debate changing the domain name of the partnership firm.	The name of the company cannot be readily changed and requires prior approval from the central government.

The elements of liability, difficulty, and decision-making are all included in the difference between a company and a partnership Firm. Companies provide limited liability and complexity, whereas partnerships offer shared responsibility and a more straightforward structure. Business objectives and liability preferences will determine which option is best.

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