Difference between a firm N company
Husne Mubarak
(Querist) 09 February 2011
This query is : Resolved
Respected Experts,
Q1: What the are the practical differences between a partnership firm and a company?
Q2: Five persons want to start a new business regarding computer supply and services. Should they opt for a partnership firm or a company? What do you suggest?
With regards
Husne Mubarak.
Amit Minocha
(Expert) 09 February 2011
A firm is a regd. and governed under Partnership Act while Co. is registered and governed under Companies Act and there would be more paper formalities and expenses in latter to run the same.
You can always convert a partnership to Co. but not vice versa. Partnership is less complicated to operate from document angles.
If the Partnership is not LLP then liability of partners will always be unlimited. If the Partnership is not regd. then it cannot sue but can be sued.
Parveen Kr. Aggarwal
(Expert) 09 February 2011
A Company incorporated under the Companies Act, 1956 is a separate legal entity having perpetual succession and common seal whereas a partnership firm has none of them.
Advocate. Arunagiri
(Expert) 09 February 2011
The company is having a legal entity and the share holders are having limited liability.
Abhishek Marvi
(Expert) 10 February 2011
the partner is liable profit and loss oniy his share in firm
malipeddi jaggarao
(Expert) 13 February 2011
Since Company is a separate legal entity, it can sue and be sued in its own name. Whereas it is not possible in case of partnership firm. The Company has perpetual existence. Regarding your particular reference, it is advisable to have a private limited company. Registration is also simple and online. Contact any Company Secretary who can help you.
