Differentiate between company and firm.

Banking & FinanceManagementCompanies/Organisations

The major differences between company and firm are as follows −

Company

  • Registration is mandatory to establish as a company.

  • They have legal entity and can be sue/sued under its name.

  • It requires minimum capital of 1 lakh for private company and 5 lakhs for public limited.

  • It is certificate of incorporation and commencement.

  • Maximum number of members for a private company are 200 and for a public company the maximum number of members are unlimited.

  • There will be legal formalities when a company decides to wind up/dissolve.

  • For a company management of concern are its Directors.

  • There is a perpetual succession.

Firm

  • There is no mandatory registration is required for a firm.

  • There is no separate legal entity and can’t enter into contracts with their own name.

  • No minimum capital requirement is required.

  • Partnership deed in case of partnership firm or LLP.

  • Maximum number members for a firm are 100.

  • No legal formalities required when a firm decides to dissolve/wind up.

  • For a firm management of concern are its partners.

  • There is no perpetual succession.

raja
Published on 25-Jul-2020 06:51:16
Advertisements