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Difference between Partnership Firm and Joint Stock Company
| Aspect | Partnership Firm | Joint Stock Company (Company Business) |
|---|---|---|
| 1. Formation | Formed by an agreement between two or more individuals. | Created by law through a process of incorporation. |
| 2. Legal Status | Not a separate legal entity from its partners. | A distinct legal entity separate from its shareholders. |
| 3. Liability | Partners have unlimited liability, jointly and severally. | Shareholders have limited liability, typically up to the amount invested. |
| 4. Ownership | Owned by a group of individuals (partners). | Owned by shareholders who hold shares in the company. |
| 5. Number of Owners | Typically a smaller number of owners (partners). | Can have a large number of shareholders. |
| 6. Transfer of Ownership | Transfer of ownership may require the consent of partners. | Shares can be easily transferred without affecting the company's operations. |
| 7. Management | Management responsibilities are shared among partners. | Separation of ownership and management; managed by a board of directors. |
| 8. Decision-Making | Decision-making is shared among the partners. | Decisions are made by the board of directors on behalf of shareholders. |
| 9. Capital Contribution | Capital is contributed by all partners based on agreement. | Capital is raised by issuing shares to the public or private investors. |
| 10. Continuity | Continuity can be limited, dependent on the partnership agreement and changes in ownership. | Generally, has perpetual existence, unaffected by changes in shareholders. |
| 11. Accountability | Partners share responsibilities and are mutually accountable. | Shareholders have limited accountability; they are not directly involved in day-to-day operations. |
| 12. Regulation | Less regulatory compliance compared to companies. | Subject to more extensive regulatory requirements and reporting. |
| 13. Public Offering | Typically not involved in public offerings of shares. | Can issue shares to the public through Initial Public Offering (IPO). |
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