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Entity:
A company has a legal entity, separate from its shareholders or also called members. Members represent the company. Creditors and Debtors of the company are of the company alone and they can't proceed against the members personally.
A partnership firm has no legal entity separate form the members. It dies upon the death of a partner or upon separation between them. Partners are responsible for each and every debt or credit directly.
Liability:
In a company, the shareholders have a limited liability (That's why it is called private limited or public limited). Individually, all the share-holders have the liability to the extent of the amount of the shares held by them for which they haven't yet paid for. So once you have paid up the price for the shares to the company, your liability is over. You are not bound to pay anything towards the debts, which the company has incurred.
In a partnership form each partner has an unlimited liability and is personally liable for all the debts of the firm.
Registration and Legal Formalities:
It takes one day to register a partnership firm. While a company registration is a 2-4 week long process. See my previous post on the process and cost of company incorporation. Company incorporation is much more expensive too.
There are many legal formalities in case of a company which are on-going too. For example, The external auditing of the accounts of a company is a legal necessity, but in case of a firm until the annual turn-over doesn't cross 40 lacs, audit is not necessary.
Management and Control:
All the partners of a firm are entitled to take part in the management. But in case of a company the board of directors, elected by shareholders, control and manage the business.
Every shareholder doesn't have to worry about the management of the company. Only majority voting power (>50%) is needed to control the most operations of a company (in a few very important cases >75% is required).
While in case of a firm, consent of all partners is required to carry out any important decisions etc.
Winding up:
A partnership firm can be wound up at any time by any partner if it is at will, without any legal formalities.
Winding up a company is a long and painful legal process. Remember that a company is a legal entity. So when law gives birth to a company, only law can kill it.
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What is the differences between private limited company limited company?
Difference between Private Limited and Limited firm
What disadvantages does a partnership have when compared to a private limited company?
If the partnership go into debt, you can lose personal assets aswell as the businesses assets. A private company's assets can only be ceased if the company go into debt.
What is a difference between public private partnership and private public partnership?
No, both refer to joint efforts by private companies and governmental bodies.
What are the differences between a public and private company?
public means anyone private means certain people that already knew about the corporation
What does a partnership gain if it becomes a private limited company?
need answers please
What is the difference between a limited company any a P.L.C.?
a public limited company can offer to sell shares to the public where as a private limited company can not. The other differences between PLC and LTD is that a private company is quoted on stock exchange where as a public limited company is not quoted on stock exchange.
What does Company Name BV mean?
Besloten Vennootschap is the Dutch terminology for a private limited liability company. The company is owned by shareholders, and the company's shares are privately registered and not freely transferable. The phrase means "secluded partnership" or "private partnership" and it is the most common form of enterprise in the Netherlands.
What are the advantage and disadvantage a private limited company as against a partnership?
Partnership is between any two or more persons joining together for some activity , and all liability is on the partners. A private limited company is a different entity formed by a group of persons or other companies(Not more than fifty) with a liability limited to their share value
Different forms of business according to ownership?
close cooperation/partnership/sloe trader/public company / private company
What is the site for checking final year bcom results?
which one of the following is an unincorporated organisation? a) General partnership b) Limited liability partnership c ) Public limited company d) Private limited company
What is the difference between private banking and non-private banking?
"There are many differences between private banking and non-private banking. The differences are as follows: number of directors, issue of prospectus, consent of directors, and the transferability of shares."
What is National Dairy Holdings?
National Dairy Holdings is a partnership between the DFA and private investors
