Partnership is governed by the Partnership Act, 1932. Ease of formation – Time consuming and difficult. Distribution of Profits – Profits are distributed according to the terms of the Partnership Deed or equally if there is no agreement. 7. (v) Contracts – In case of partnership, a partner cannot contract with his own firm. 2. Number of members – Minimum -2; maximum -50. There is no maximum limit to the number of members in a public limited company. A partner cannot transfer his share and interest in the partnership business without the consent of all the other partners. Number of persons – Minimum 2 partners and maximum is limited to 20 partners but in case of banking company it is limited to 10 partners. In case of a public limited company, the minimum number is 7 and maximum limit is set by number of shares into which the authorized capital of the company is divided. 5. 11. vii. 1. 11. 11. Transfer of ownership share- Restricted transferability. A company is a distinct legal entity separate from that of the investors contributing to its capital. Management- Through a board of directors. 15. 8. 3. The shareholders of a company enjoy perfect freedom to transfer their shares to others without consulting anybody. 1. 10. It cannot become a partner in another firm. While firms are mainly involved in professional services, companies are involved … This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. Legal status – A company gets a separate legal status apart from its members. It has a personality of its own, independent of its members. The partners can, by mutual agreement, change them as and when they like. 2. The shareholders who own the capital of a company cannot take part in the management of its affairs. 3. 6. 3. Management Talent – Ability to attract professionals is limited on account of its restricted scale of operations. 5. A partnership can, however, have a maximum of 20 members for ordinary business, and 10 members for banking business. It acts in its own name. 4. All companies are governed by the Companies Act. A company is a voluntary association of persons, recognised by law, having a distinctive name, a common seal, formed to carry on business for profit, with capital divisible into transferable shares, limited liability, a corporate body and perpetual succession. 6. Registration – Registration under Indian Companies Act is compulsory. Content Guidelines 2. v. Number of members- For public limited company, minimum number is 7 with no upper limit. Control by states- Very limited control and regulation. Transferability of shares – The shares in a company is transferable, with the result that shareholders can go on changing. 5. iii. 4. Solve of account – Maintaining books of accounts is optional. Law – Indian Companies Act, 1956 applies. Management – Managed and controlled by all the partners. The liability of the shareholders of a company is limited either to the nominal value of its shares or to the amount of guarantee given by them in case of companies limited by guarantee. Mobilisation of resources- Huge amount can be raised through issue of shares. There are a few restrictions on transfer of shares of private limited company. 11. 10. The objects of a partnership firm and rights and duties of individual partners can be changed with the unanimous approval of all partners; so can its capital be altered by mutual consent. A partnership has no legal existence apart from the partners. Stability – Shareholders’ death, insolvency or transfer of shares do not affect the continuity of the company. In a public company the minimum number is 7 and there is no maximum limit set by Law. 12. There are no statutory requirements in this regard for a partnership firm. 13. 1. One or more partners can sign documents on behalf of others. 12. 4. Regulation of working – Day to day affairs not subjected to any rules set by Law.