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What are key differences between a partnership firm and a company?

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What are key differences between a partnership firm and a company?
posted Jul 18, 2017 by Adarsh

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Registration is not compulsory under Indian Partnership Act, 1932 whereas company comes into existence after the registration under Companies Act, 1956.
- In the case of partnership firm the number of members must not exceed 20 in any business and minimum is 2 whereas in a private limited company minimum is 2 and maximum is 50 and in public limited company minimum 7 and no maximum limit.
- Partnership firm do not have an independent legal position or status whereas company is independent legal status.
- In partnership firm partners have unlimited liability whereas liability of shareholders is limited to the amount of the shares they hold.
- In partnership firm transfer of interest is not transferable without consent of other partners whereas in a company shares are freely transferable without consent of other members.
- Audit is not mandatory for a partnership firm whereas accounts of a company must be audited annually.
- In a partnership firm stability of business is not affected by death or insolvency of partner whereas in the case of a company shareholder's death or insolvency would not affect the constitution of the company.

answer Jul 19, 2017 by Chetan Hindu