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Difference Between Partnership And Company

  1. The members of the partnership firm are called partners whereas the members of company are called shareholders.
  2. The partnership business is to be governed by the Indian Partnership Act, 1932 whereas the business of the company is determined by Indian Companies act, 2013
  3. Partnership firm is created by contract between two or more persons whereas company is created by law i.e registration.
  4. The rules of a partnership are to be registered by the state government whereas in the case of the company it is to be regulated by the central government.
  5. Registration of a firm is not necessary whereas the company's registration is mandatory.
  6. The mandatory document in case of partnership is partnership deed whereas in the case of a company the mandatory document is the memorandum of association and articles of association.
  7. A partnership firm is not a separate legal entity from its partners whereas a company is a separate legal entity. 
  8. Partners have unlimited liability whereas shareholders have limited liability.
  9. Seal ( Stamp ) is not required for partnership whereas in case of company stamp is required.
  10. In case of partnership, management is to be done by active partners whereas in case of company management is done by the board of directors.
  11. Decree against a firm can be executed against partners whereas decree can't be executed against shareholders.
  12. In the case of a private company, the word is to be used Pvt. Ltd and in case of a public company, the word is to be used Ltd. only whereas such words are not required in case of partnership.
  13. A partnership firm has to maintain accounts as per the conditions stated in partnership deed whereas a company should maintain accounts and auditing of accounts by a certified Chartered Accountant.
  14. The name of the partnership firm can be changed easily by having discussion between the partners and by following the simple procedure provided in s.60 whereas the name of the company can't be changed easily and prior approval of the central government is required.

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