Distinguish Between – Partnership Firm and Joint Stock Company

HSC  Board of Maharashtra – Organization of Commerce and management – Studies notes, study material,distinguish between, difference between Partnership Firm and Joint stock company .

Sr. NoBasis of DifferencePartnership FirmJoint Stock Company
1.MeaningTwo or More persons come together for some business activity & agree to share profit & loss is called partnership firmIt is Voluntary association of individuals for profit having capital divided into transferable shares, the ownership which is the condition of membership
2.MembershipPartnership firm owned by two or more and maximum 10 in banking and 20 in other firmsIn private limited company minimum of numbers of members are 2 and maximum numbers are 50. In public limited company minimum numbers are 7 and no maximum number limit
3.FormationFormation is simple and less costly. only a partnership deed is required. Registration is optional [ except in Maharashtra ]Formation involves many complicated legal formalities. Therefore it is costly legal formalities. Therefore it is tremendously time-consuming
4.LiabilityLiability of partners are unlimited.Liability of every shareholder is limited to the extent of the unpaid amount on shares held by him
5.ActPartnership is controlled under partnership Act, 1932Joint stock company is controlled under the Indian companies Act, 1956

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