Question

Except the mode of registration, there is no significant difference between a company and a partnership firm :

• A. True
• B. False
• C. Partly true
• D. Partly false

Answer 1

The correct option is B False

• A partnership is a type of business that is owned by two people. The owners of the company contribute resources, management skills, and make decisions on how the company will operate on a daily basis. Some of the benefits enjoyed by the partners include quality decision making and capital contribution. The partners may experience some challenges because they have to share the profits of the organization.

• A company is a legal entity that is formed when a certain number of people come together with the same intention of providing goods or services to the customers. Some of the advantages of a company include being a legal entity and quality decision making.
• Company should be compulsorily registered under the Companies Act. Its formation is very difficult. But registration of a partnership firm is not compulsory under the Partnership Act. The firm is based on the partnership deed. Its formation is very easy. A company is a body corporate and a legal person having a corporate personality distinct from its members. The members are not liable for the acts of the company. But a partnership has no legal existence distinct from its members. Partners are liable for the acts of the firm. There are other main differences between partnership an company.