partnership and company(act2013) difference

1) mode of formation

partnership-is set up by an agreement among the partners

registration is not comulsory under the partership act

section69-effect on non registration of partnrship *

comapny act-

Company is set up by registration underthe company act 2013or under any of the previous company act

The certificate of incorporation is a conclusive evidence(S.4 of IEA) of the registration of the company ,an
unregistered company become either a partnership or an illegal association depending upon the number
of members

Partnership is not a distinct legal enitity ,person who have enetered into partnership are called
individually partner and collectively firm

in the case of company the members are quite distinct from the company which is a juristic person

The agreement bw the prsons that brings a partrship into existence may or may not be in writing and if it
is in writing it becomes a private document(74-75 iea),outsider can't have recourse to its content .

however the agreement the that brings a comapny into existence called memorandum of association
(contains aim and object of the company) must be in writing and it is public document.

2)NO. of persons

In pt-no upper limit , but minimum no . is 2( there can be a minir partner but in relation to 2 members
they must be competent)

maximum 50 as per sec 464 of the company act,2013 and rule 10 ofthe miccelenous act

company-

a) in public ltd - min7 and max no limit

b)private ltd ,min.2 ,max.200

c)one person company - only one person

3) LIABILITY

partership - the liability of a partnere may be joint or severally or unlimited

but in comany the liability of the partner is limited to the face values of the shares held by him or the
amount guaranteed by him depending on the whether the liability of the members are limited by the
shares or by guarantee(but here are certain unlimited liability company :exception)

4) MANAGEMENT

partnership- every partner is entitled to take part in the management of partnership

in case of company ,the management of its affairs are entrusted to the board of directors duly elected by
the members.

principal and agent relationship is the essence of the partnership ,every partner is the agent of the firm
to amke cntracts in behalf of the firm

in case of company , no member is the agent of the comapny or of any other member

5) transferability of the share

pt- a partner can't transfer his interest in the partnership without the consent of other partners, if he
does so without the consent of any others the partnership is deemed to be dissolvd ,

A share holder in a company ,however can effect the transfer of his share without the consent of any
other member while the share of a public comapny is freely tranferable but certain restrictions in pvt.
company are imposed

6)DISSOLUTION AND WINDING UP

pt - is dissolved by the death or insolvency of the partner ,

a company is not affected by any such contigency ,a comany enjoys perpetual succession

SECTION 5 Partnership

pt and joint hindu family distinction

pt arises on the basis of acontract as states ib section 4 and 5 of the act

a joint hindu family firm arises on the basis of status( birth ,marriage , adoption , death etc)

admission of new members in pt with the consent of all the partners ,the mebership of a joint.., is
automatic by the birth or in case of adoption tnto the family of a male members if that family is carrying
a bizz

a minor can also be a member thusthe membership of joint.. keepschanging whersas in pt the
membership reamin more or less fix
sec 25 every pt is liable jointly with others as well as ersonally for the acts of the firm

in caseof joint...,the members are not prsonally liable and the liability of the members are limited to
there share and prifits to their bizz. it is only the manager orkarta who is personally loable to an
unlimited extent on case of pt the liability of the partener is unlimited.

the death of the partner brings about the dissolution of partnership unless ther is a contract ito contrary
as section 42 but the death of a coparcener dos nnot dissolve a joint family biz.

a partner has the right to demand the share of his bizz but a coparcener has no such right he can only
demand the partition and separate himself from the bizz