Question

Distinguish between: Partnership Firm and Joint-stock Company

Answer 1

Sr. No.	Basis of Difference	Partnership Firm	Joint Stock Company
1.	Meaning	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.
2.	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 50. In a public limited company, minimum number of members is 7 and there is no maximum limit.
3.	Formation	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. Therefore it is a time consuming.
4.	Liability	The liability of partners is unlimited. It is joint as well as several (quit a few).	The liability of every shareholder is limited to the extent of the unpaid amount on shares held by him.
5.	Act	Partnership is controlled under Indian Partnership Act, 1932.	Joint stock company is controlled under the Indian companies Act, 1956.
6.	Registration	Registration of partnership firm is optional. (except in Maharashtra)	Registration of Joint Stock Company is Compulsory under India companies Act, 1956.