Revision: Enterprise Planning Entrepreneurship Commerce (English Medium) Class 12 CBSE

A partnership is a form of business in which two or more persons come together to carry on a business and share its profits and losses as per an agreed-upon partnership deed.

• Section 4 of the Indian Partnership Act, 1932, defines partnership as ''Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.'' 
• According to Prof. Handy, "Partnership is the relation existing between persons competent to make contract, who agree to carry on a lawful business in common with a view to earn private gain.

1. “A Joint Stock Company is a voluntary association of individuals for profit having capital divided into transferable Shares, the ownership of which is the condition on membership.” – Prof. L. H. Haney.
2. “A Company is a person, artificial, invisible, intangible, and existing only in the eyes of the law. Being a mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence.” – Chief Justice Marshal
3. According to The Companies Act 2013, Section 2 (20), the term “Company” means “a Company incorporated under the Companies Act 2013 or any previous Company law.”

A Joint Hindu Family Business is a family concern that operates under the provisions of the Hindu Law and the Hindu Succession Act 1956. It may be defined as a business organisation which is inherited or owned, conducted and managed by the members of a Hindu undivided family, pointedly under the direction and control of the senior-most member of the family, called karta, for earning profits.

Under Hindu Law, an HUF is a family that consists of all persons lineally descended from a common ancestor and includes their wives and unmarried daughters. An HUF cannot be created under a contract.

• Meaning: A partnership is when two or more people join to run a business and share profits as per a mutual agreement.
• Key Features: Based on agreement, profit-sharing, mutual agency, legal limit of 50 partners, and lawful business only.
• Nature: Treated as separate for accounting, but not legally—partners are personally responsible for the firm’s debts.
• Rights of Partners: Take part in business, share profits, check accounts, get interest on loans, and retire with notice.
• Liabilities: Unlimited; partners must use personal assets if needed and can’t keep personal gains made using the firm’s name/assets.

• Meaning: A Joint Stock Company is a business organisation where ownership is divided into transferable shares held by shareholders.
• Origin: It emerged during the Industrial Revolution to overcome the limitations of partnerships, such as unlimited liability and limited capital, by raising funds from the public.
• Legal Status: A Joint Stock Company is an artificial legal person with a separate legal identity and perpetual succession, created under company law.
• Merits: It provides benefits like large capital, limited liability, expert management, public confidence, and better scope for expansion.
• Types: Companies can be Chartered, Statutory, or Registered, and further classified as Public, Private, Limited, or Unlimited.