Question

Distinguish between the following:

Partnership Firm and Joint Stock Company.

Answer 1

Partnership firm	Joint stock company
A partnership firm is a form of business organisation 1 owned and managed by two or more persons i.e. partners for earning profit.	A joint stock company is an incorporated voluntary association of individuals for profit, created by law, owned by the shareholders but managed by their few representatives, i.e. Directors.
The minimum number of members is 2, While the maximum number of members is 10 in the case of banking business and 50 in the case of any other business.	In the case of a private company the minimum number of members is 2 and the maximum number of members is 200. In the case of Public Company the minimum number of members is 7 and the maximum number is unlimited.
The formation of a partnership firm is easy and simple. Minimum legal formalities are involved. Only an agreement is necessary. Even registration is not compulsory. However, it is compulsory in the state of Maharashtra.	The formation of a joint stock company is rather difficult and complicated. Numerous legal formalities are involved. Registration is compulsory, costly, complicated and time consuming.
The liability of all the partners except minor partner is unlimited, joint as well as several.	The liability of the shareholders is limited to the extent of the unpaid amount, if any, on the shares held by them.
The Partnership firm is regulated and governed by the provisions of the Indian Partnership Act, 1932 and also by the companies Act 2013.	A joint stock company is regulated and governed by the provisions of the Indian Companies Act, 1956.
The partnership firm has no separate legal status distinct from its members (Partners).	A joint stock company has separate legal status distinct from its members (Shareholders).