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Difference between partnership firm and joint stock company

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The company form of business organization enjoys a number of benefits over the partnership. This is due to the fact that, in a partnership firm, there must be at least two persons, mutually agree to run the business and share the profits or losses in a manner prescribed in the agreement. The maximum number of partners a partnership firm could have is only This gave rise to the evolution of Company, in which there can be any number of members. The company is an association of persons who came together for a common objective and share its profit and losses. Despite the fact that, there are some similarities between the company and partnership firm, there are a number of dissimilarities as well.

SEE VIDEO BY TOPIC: DIFFERENCES BETWEEN PARTNERSHIP AND HUF BUSINESS

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SEE VIDEO BY TOPIC: DIFFERENCE BETWEEN PARTNERSHIP AND COMPANY

Partnership

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An association engaged in a business for profit with ownership interests represented by shares of stock. A joint stock company is financed with capital invested by the members or stockholders who receive transferable shares, or stock. It is under the control of certain selected managers called directors. A joint stock company is a form of partnership, possessing the element of personal liability where each member remains financially responsible for the acts of the company.

It is not a legal entity separate from its stockholders. A joint stock company differs from a partnership in that the latter is composed of a few persons brought together by shared confidence. Partners are not free to retire from the firm or to substitute other persons in their place without prior assent of all the partners. A partner's death causes the dissolution of the firm. In contrast, a joint stock company consists of a large number of stockholders who are unacquainted with each other.

A change in membership or a transfer of stock has no effect on the continued existence of the company and the death of a stockholder does not result in its dissolution. Unlike partners in a partnership, a stockholder in a joint stock company has no agency relationship to the company or any of its members.

A joint stock company is similar to a corporation in that both are characterized by perpetual succession where a member is allowed to freely transfer stock and introduce a stranger in. Anxious investors wait for news about the South Sea Company, a joint stock company formed in London in Joint stock companies are a form of partnership in which each member, or stockholder, is financially responsible for the acts of the company.

The transfer has no effect on the continuation of the organization since both a joint stock company and a corporation act through a central management, board of directors, trustees, or governors. Individual stockholders have no authority to act on behalf of the company or its members. A joint stock company differs from a corporation in certain respects. A corporation exists under a state charter, while a joint stock company is formed by an agreement among the members.

The existence of a joint stock company is based upon the right of individuals to contract with each other and, unlike a corporation, does not require a grant of authority from the state before it can organize.

While members of a corporation are generally not held liable for debts of a corporation, the members of a joint stock company are held liable as partners. In a legal action, a corporation sues and is sued in its corporate name, but a joint stock company sues and defends in the name of a designated officer.

Joint-stock company

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Partnership and Company are the most familiar terms for the people who are pursuing business education or commerce education. This article presents you the top differences between Partnership Firms and Companies. The members of the Partnership firm are called as Partners.

An association engaged in a business for profit with ownership interests represented by shares of stock. A joint stock company is financed with capital invested by the members or stockholders who receive transferable shares, or stock. It is under the control of certain selected managers called directors. A joint stock company is a form of partnership, possessing the element of personal liability where each member remains financially responsible for the acts of the company.

Distinguish Between – Partnership Firm and Joint Stock Company

In this form of business organization two or more persons come together to undertake a business activity and share profits. It is voluntary association of individuals for profit having capital divided into transferable shares, the ownership which is the condition of membership. There can be a minimum of 2 partners and a maximum of 10 partners in banking business and 20 in non-banking business. The minimum of number of members are 2 in private limited company and a maximum of In a public limited company, minimum number of members is 7 and there is no maximum limit. The formation is comparatively simple and less costly. Only a partnership deed is required to be prepared. The formation involves many complicated legal formalities. Therefore it is tedious, costly legal formalities.

Define partnership. What are the differences between partnership and Joint Stock Company?

A partnership is an arrangement where parties, known as business partners , agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses , interest -based organizations , schools , governments or combinations. Organizations may partner to increase the likelihood of each achieving their mission and to amplify their reach. A partnership may result in issuing and holding equity or may be only governed by a contract.

A company that operates its business by getting combined capital, limited liability, having a distinct personality and perpetual succession by law is called a Joint Stock Company.

A company is regulated by Companies Act, , while a partnership firm is governed by the Indian Partnership Act, A company cannot come into existence unless it is registered, whereas for a partnership firm registration is not compulsory. The minimum number in a public company is seven and in case of a private companies two. In case of partnership the minimum number of partners is two.

What is Joint Stock Company

A joint-stock company is a business entity in which shares of the company's stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares certificates of ownership. In modern-day corporate law , the existence of a joint-stock company is often synonymous with incorporation possession of legal personality separate from shareholders and limited liability shareholders are liable for the company's debts only to the value of the money they have invested in the company. Therefore, joint-stock companies are commonly known as corporations or limited companies.

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Partnership Firm Joint Stock Company. Basis of Difference. Partnership Firm. Joint Stock Company. In this form of business organization two or more persons come together to undertake a business activity and share profits.

Difference between Partnership and Company

The following are some of the differences between a Partnership firm and Joint Stock Company. Minimum number of members is two in a Partnership firm. Whereas in Joint Stock Companies, Minimum number is two in a private company and seven in a public company. In a Partnership firm, maximum number of members is 20 in general business and 10 in banking firms. In a Joint Stock Company, maximum number of members is 50 in a private company and there is no maximum limit in public company. Registration of a Partnership firm is not compulsory. Registration of Joint Stock company is compulsory.

Partners are not free to retire from the firm or to substitute other persons in their Unlike partners in a partnership, a stockholder in a joint stock company has no.

A partnership is an association of two or more than two persons who have combined together to share the profits of business carried on by all or any of them acting for all. Partners are basically persons who own the partnership business individually. It sometimes happens when one partner provides the major portion of the capital and the others contribute their skills i.

We can distinguish between partnership and joint stock company by the following ways : 1. Formation :- Partnership : It is formed by a written agreement. Joint stock company : It is formed under the company ordinance.

Organizational productivity largely depends upon the effective utilization of human resources Organizations are made up of people and without people there are no organizations. Therefore managers in the organization must have a proper understanding of human behavior in order to make the organization more productive. This book on "Organizational Behavior" is written in a lucid style which will be greatly beneficial to the students as well as for aspiring managers.

The Companies Ordinance has provided. A private company can become public company by altering its articles.

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