Upgrad LLM

difference b/w firm and comapny


Dear sir,

Kindly any one please explain difference b/w Firm & Company?.....

we are group of people planning to start a business so please guide us which registration is better?

 

Thanking you

kamalakar

 
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CS

Business can be done as a sole proprietorship (one man doing business in his name ), a firm which can be partnership Firm or LLP (Registered as Limited Liability Partnership) or a Company (Private or Public. main difference between Partnership firm & Company is its legal set up & legal Liability.

 

Firm is governed by the Partnership Act & the liabilty of partners is unlimited. This means the personal assets of Partners can be used to meet Firm liabilities. However legal Compliances are less. Now another option is LLP Limited Liability Partnership where Liability is limited as limited company but it has to be registered with Government, Thus legal complainces are there.

 

Companies can be private or Public registered under the Companies Act, 1956. Private company can be formed by two person & with minumum capital of 1 lac. For Public Company minimum 7 persons are required and minimum capital required is 5 lac. Liability is limited in case of Company.

 

If u can tell what type of business u r planning...may be I will be able to tell u which legal mode shall be best suited to your case.


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Advocate

Partnership is governed by Partnership Act. A company by Companies Act. In Partnership is of two kinds, 1) Normal

2) Limited Liability. Companies normally be either Private or Public Limited . Depending on the volume of business, and nature  go for the correct one.  Formation charges and formalities are elaborate in the case of companies.


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Dear Sir,

Thank you for your kind reply.
.

.

We are planning to start electrical & mechanical contract work like(supply & service).

One of my friend already doing the contract works and he has a company also....now we (other two persons) planning to join with him and continue the contract business. is there any chances for him to do  fraud in business ...if so please suggest us how to make agreement with him by which we cant get problems with him..

Thanking you


-kamalakar katakam

 
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CS

U can check all company information on website www.mca.gov.in

Ask him for copy of Certificate of Incorporation, Memorandum & Articles of Association , List of Shareholders and Directors.

Also ask for last two or three years Balance sheet so that u can see the financial position of Company.

If it is Company its name must end with words Private Limited or Limited.

If these words are not there than it is firm even if it used the word Company.

 
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Dear sir,

Thank you very much...

 

please provide me your contact number to get more clrifications and valuble suggestions from you.

 

Kamalakar katakam

 
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Dear Sir,

Please suggest that which is better one whether MOU or Contract while we work with partner(other company) to do out side works.

 

Thanking you

 

Kamalakar katakam

 
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Advocate

MOU is only an understanding reduced to writing. In order to get legal status, agreement  enforceable law is better.

 
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