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Distinguish Between Partnership Firm Joint Stock Company - Organisation of Commerce and Management

Distinguish between Partnership Firm Joint Stock Company

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Solution

Sr.

No.

Basis of Difference

 

Partnership Firm

 

Joint Stock Company

 

1.

 

 

Meaning

In this form of business organization two or more persons come together to undertake a business activity and share profits.

It is voluntary association of individuals for profit having capital divided into transferable shares, the ownership which is the condition of membership.

 

2.

 

Membership

There can be a minimum of 2 partners and a maximum of 10 partners in banking business and 20 in non-banking business.

The minimum of number of members are 2 in private limited company and a maximum of 50. In a public limited company, minimum number of members is 7 and there is no maximum limit.

 

3.

 

Formation

The formation is comparatively simple and less costly. Only a partnership deed is required to be prepared.

The formation involves many complicated legal formalities. Therefore it is tedious, costly legal formalities. Therefore it is a time consuming.

 

4.

 

Liability

 

The liability of partners is unlimited. It is joint as well as several (quit a few).

The liability of every shareholder is limited to the extent of the unpaid amount on shares held by him.

 

5.

Act

Partnership is controlled under Indian Partnership Act, 1932.

Joint stock company is controlled under the Indian companies Act, 1956.

 

6.

 

Registration

Registration of partnership firm is optional. (except in Maharashtra)

Registration of Joint Stock Company is Compulsory under India companies Act, 1956.

Concept: Concept of Partnership
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