Differentiate between company and firm.

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.