A Company



Mode of Creation: A company comes into existence after registration under the Companies Act, 1956.

 Mode of Creation: In the case of a Partnership firm registration is not compulsory.   


Legal Status: A company is a body corporate. A Company has a legal personality distinct from that of its members.  

Legal Status: Partnership is an unincorporated association of Individuals. A firm is not a distinct person; it is made up of the several persons who Compose it.


Numbers of Members: The maximum numbers of shareholders in a private company is fifty. There is no statutory limit to the maximum number of members in case of a public company.

Numbers of Members: The maximum number of partners in a firm carrying on business can be ten and in any other business twenty.


Liability of Members:  The liability of members of a company (except an unlimited one) to contribute toward satisfaction of the company’s debts and liabilities is limited.  

Liability of Members: In the case of Partnership firm liability of partners to contribute toward the payment of the partnership’s debts and liabilities is unlimited.


Management: The affairs of a Company are managed by its directors, or managing directors or manager and its members have no right to take part in the management.

Management: In the case of Partnership, Every member of a partnership may take part in its management unless the partnership agreements provide otherwise.


Transferability of interest: Shares in a company are freely transferable unless its Article otherwise provides.    

Transferability of interest:  In partnership, a partner cannot transfer his share without the consent of the other partners.


Authority of members: A shareholder is not an agent of the company.

Authority of members: Each partner is an agent of the company.


Powers:  A company’s powers are limited to those allowed by the objects clause in the memorandum.

Powers: a partnership firm can do anything which the partners agree to do and there is no limit to its activities.  


Insolvency, Winding up of Company: The winding up of an insolvent company does not make the members insolvent.

Insolvency of a firm: The insolvency of a partnership firm means insolvency of all the partners.


Debts: If a Company owes a debt to any of its members he can claim payment out of its assets when it is wound up rateably with its other creditors.

Debts:  A Partner who is owed money by his firm cannot usually prove against the firm’s assets in competition with its other creditors.   


Dissolution: A company comes to end only when it is wounding up according to the provisions of the Companies Act.   A company has a perpetual succession. No personal circumstance affecting a member, such as death, insolvency or unsoundness of mind, will affect its existence.

Dissolution:  Unless a partnership is entered into for a fixed period, it may be dissolved at any time by any partner, and every partnership will automatically be dissolved by the death or insolvency of a partner.  


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