Question

Differences between partnership and one person company.

Answer 1

Sr. No.	Basic of Distinction	Partnership	One Person Company
1.	Mode of creation	A partnership is created by an agreement executed among two or more partners.	A One Person Company is created by incorporation under the Companies Act.
2.	Number of members	A partnership requires at least two partners and allows up to fifty partners.	A One Person Company has a separate legal entity distinct from its sole member.
3.	Liability	The partners have unlimited, joint, and several liability for the debts of the firm.	The sole member’s liability is limited to the unpaid amount on shares held, except in cases of fraud or wrongful acts.
4.	Continuity	A partnership can dissolve on death, retirement, insolvency, or mutual agreement of partners.	A One Person Company enjoys perpetual succession and continues irrespective of the member’s death or incapacity.
5.	Mutual agency	Each partner is an agent of the firm and of the other partners.	The concept of mutual agency does not apply because there is only one member.
6.	Transfer of interest	A partner cannot transfer their interest without the consent of all the other partners.	Ownership in a One Person Company can be transferred by transferring its shares, subject to legal requirements.
7.	Registration	Registration of a partnership firm is optional, although it is generally advisable.	Registration of a One Person Company is compulsory because it is a company form.
8.	Governing law	A partnership is governed by the Indian Partnership Act, 1932.	A One Person Company is governed by the Companies Act, 2013 and related rules.