Sole proprietorship, Partnering business, Public and Private limited are few forms of business organization. Every one has different features as well as advantages and disadvantages. Starting business may be hard without knowledge of country’s law. UK Company law may be different from Germany. In general, the basics are the same. In this reading, you’ll be able to analyze difference between Partnership and Company [Public Limited].
The Difference
1. Formation
Public Limited Company
There is a long and complicated process for the formation of public company. Many legal documents are to be prepared and submitted to the registrar’s office which requires long time.
Partnership
There is simple process for the formation. No legal documents are necessary. Agreement by oral or written is required only for formation.
2. Liability
Public Limited Company
The liability of share holders is limited to the unpaid value of the share holders are not liable to settle the obligations of the company.
Partnership
It is one from the biggest disadvantages of partnership is that every partner had unlimited liability in his firm. It means that the liability of partners is not limited to the invested amount but private assets are also liable to clear the liabilities of the firm.
3. Number of Members
Public Limited Company
There is no restriction for the maximum numbers of members. It may be million or thousand but not less than seven.
Partnership
It consist of at least two partners but not more than twenty in case of ordinary business and not more than ten in case of banking business.
4. Transferability
Public Limited Company
There is no restriction for transforming of share of public company shareholders may easily dispose of their share in the stock exchange market.
Partnership
A partner cannot transfer his share and interest to another persons without the consent of existing partners.
5. Entity
Public Limited Company
It is created by law and posses separate legal entity. So it can purchase property in its own name. it can sue in its separate position.
Partnership
It has no separate legal entity form its members. Partners cannot be separated from the firm.
6. Capital
Public Limited Company
Its authorized capital is mentioned in the memorandum of association. It can be increased or decreased by special resolution which is passed in the share holders meeting after the sanction of court.
Partnership
Its capital is described in the agreement. It may be changed by mutual consent of the partners.
7. Maintenance of Books
Public Limited Company
Statutory books and other account books are to be maintained law.
Partnership
There is no compulsion to keep statutory or definite books. Each partner is allowed to inspect and copy the accounts.
8. Legislation
Public Limited Company
The activates of the public companies are controlled by the company ordinance 1984.
Partnership
It is controlled by the partnership Act 1932 which was adopted in our country after partition.
9. Management Authority
Public Limited Company
Share holders who are the actual owners of the company are not allowed to participate in the activities of the company. but board of directors is elected by the share holders which is elected by the share holders which is considered supreme authority of the company. so all the activities are conducted by these persons.
Partnership
Each partner is allowed to conduct personally the business ness activities. But generally one or two partners are selected to manage the firm.
10. Profit
Public Limited Company
Profit is distributed among the share holders according to the provision of Articles and decision of the Board of Directors.
Partnership
It is distributed among the partners according go partnership deed.
11. Audit
Public Limited Company
Accounts must be audited by the qualified chartered accountant according to the companies ordinance.
Partnership
Audit is not compulsory by law but it depends upon the agreement.
12. Dissolution
Public Limited Company
It cannot to dissolved easily. There is a separate legal process for the winding up of company. it can be wound up according to the provision of company Act.
Partnership
It can be dissolved easily by mutual consent of the partners. It may be dissolved by any one of the partners by serving notice of fourteen days to other partners
13. Right of Issue
Pubic Limited Company
It can issue shares, debentures and other securities to increase its capital and business fund
Partnership
It cannot issue any type of securities in the market to increase its financial sources.
14. Life
Pubic Limited Company
It has continued existence. The life of the directors and shareholders is not connected with running business life of the company. so its activities are not affected by the retirement or death of any shareholders.
Partnership
It does not possess long life. Its business may be affected by the death insolvency or retirement of any partner.
15. Submission of Reports
Pubic Limited Company
Certain documents, statements and reports must be submitted to the government authority.
Partnership
There is no restriction to submit the various reports and documents to any authority.
16. Business
Pubic Limited Company
The promoters are restricted to carry on business which in mentioned in the object clause of memorandum of association.
Partnership
Partners may carry on any type of business and it may easily be changed by mutual consultation.
17. Meeting
Pubic Limited Company
It has to call necessary meetings of share holders in which problems are disposed of by various resolutions.
Partnership
No compulsion to call any type of meeting and submission of reports to the registrar.