Discover the ten Difference between Partnership and Company
When it comes to starting a business, choosing the right legal structure is crucial. While partnership and company are two common options, they have distinct differences. Here are 10 key factors and Difference between Partnership and Company to consider. Please do share online with your friends and class mates.
Difference between Partnership and Company
Formation: Partnerships are formed through an agreement between two or more individuals, while companies are registered with the government as separate legal entities.
Liability: Partners in a partnership are personally liable for the debts and obligations of the business, while shareholders in a company have limited liability.
Management: Partners in a partnership all have an equal say in the management of the business, while management in a company is usually centralized, with a board of directors making major decisions.
Continuity: A partnership dissolves upon death or withdrawal of a partner, while a company can continue to exist even if shareholders leave or pass away.
Taxation: Partners in a partnership report their share of profits or losses on their individual tax returns, while companies file their own tax return and pay taxes on their profits.
Transfer of ownership: It is difficult to transfer ownership in a partnership to another person without dissolving the partnership, while shares of a company can be easily bought and sold.
Capital: Partners contribute capital to the business and share in profits and losses in a partnership, while a company can issue stock and raise capital through investors.
Size: Partnerships are generally smaller with fewer partners and limited resources, while a company can be larger and have more resources available.
Public disclosure: Partnerships are not required to disclose financial information to the public, while companies are required to file regular financial reports with the government and disclose information to the public.
Legal status: Partnerships are not a separate legal entity from the partners, while companies are registered with the government as a separate legal entity.
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