Difference between Partnership Firm and Joint Stock Company
Basis of Difference
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Partnership Firm
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Joint Stock Company
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Regulating Act
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Governed by the Indian Partnership Act 1932.
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Governed by the Companies Act 1956.
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Number of members
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Minimum: 2
Maximum: 10 for banking business and 20 for other businesses
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In case of a private company:
Minimum: 2
Maximum: 50
In case of a public company:
Minimum: 7
Maximum: No limit
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Liability
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Partners have unlimited liability.
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Shareholders have limited liability to the extent of the unpaid amount on the shares held by them.
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Management and control
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Management and control are shared by partners.
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Management and control lie in the hands of the managing director.
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Formation
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Easy to form, as there are no legal formalities.
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Difficult to form, as there are many legal formalities.
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Financial resources
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It can raise limited financial resources.
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It can raise a large amount of financial resources.
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