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Differentiate between partnership and joint stock company?
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Differentiate between partnership and joint stock company?
The joint stock company and the partnership firm can be distinguished on the following points:-
1) on the basis of formation
partnership: It is formed by an agreement that is in written.
Joint stock: It is formed under the company ordinance.
2) On the basis of No. of members
Partnership: the no. of members can be minimum 2 and maximum 20 members.
Joint stock: it can have any no. of members those are called shareholders.
3)On the basis of liability
Partnership: the liabality of member partners are unlimited( if not mentioned in agreement).
Joint stock: the liability of members is limited(upto the value of the shares).
4) on the basis of Financing
Partnership: Members contribute the funds.
Joint stock: can borrow from bank and can issue paid up shares to get capital.
5) on the basis of tax payment
Partnership: members of registered firms need to pay tax individually.
Joint stock: the company is subject to double taxation.
6) On the basis of control
Partnership: decisions are made with the consultation with all members.
Joint stock: the decisions are made by board of directors.
7) on the basis of dissolution
Partnership: can be dissolved with mutual consent of the partners.
Joint stock: can be dissolved by numerous ways
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Differentiate between partnership and joint stock company?
Partnership
Partnership is a form of business organization where two or more individuals come together to carry out a business. The partners agree to share the profits and losses of the business in a pre-determined ratio. Partnership is governed by the Indian Partnership Act, 1932. The following are the features of partnership:
- Minimum of two partners and a maximum of twenty partners can form a partnership.
- Partnership is based on mutual trust and understanding.
- Partners are jointly and severally liable for the debts of the firm.
- Partnership is easy to form and dissolve.
- Partnership is not a separate legal entity from its partners.
Joint Stock Company
Joint Stock Company is a form of business organization where a group of people come together to form a company. The company is a separate legal entity from its shareholders. The shareholders invest their money in the company and are known as the owners of the company. The following are the features of a joint stock company:
- A minimum of seven shareholders are required to form a joint stock company.
- A joint stock company is governed by the Companies Act, 2013.
- The liability of shareholders is limited to the amount of shares they hold.
- A joint stock company has perpetual succession.
- The management of a joint stock company is entrusted to a board of directors elected by the shareholders.
Differences between Partnership and Joint Stock Company
The following are the differences between partnership and joint stock company:
| Partnership | Joint Stock Company |
|---|---|
| Partnership is not a separate legal entity from its partners. | A joint stock company is a separate legal entity from its shareholders. |
| Partnership has a maximum of twenty partners. | A joint stock company can have any number of shareholders. |
| Partners are jointly and severally liable for the debts of the firm. | The liability of shareholders is limited to the amount of shares they hold. |
| Partnership is based on mutual trust and understanding. | A joint stock company is based on the principles of democracy. |
| Partnership is easy to form and dissolve. | A joint stock company is difficult to form and dissolve. |
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Differentiate between partnership and joint stock company?
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Differentiate between partnership and joint stock company? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Differentiate between partnership and joint stock company? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Differentiate between partnership and joint stock company?.
Differentiate between partnership and joint stock company? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Differentiate between partnership and joint stock company? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Differentiate between partnership and joint stock company?.
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