17 Difference between Partnership and Company [Public Limited]

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.

Related Reading:   Digital Marketing trends impacting the Automotive Industries for business Growth

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.

Related Reading:   Top 11 Skills of a Salesman - Qualities of Salesman

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.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.