Partnership firm and Joint Stock company

Question

Distinguish between the following. 

Partnership firm and Joint Stock company

Answer 1

Basis of Difference	Partnership Firm	Joint Stock Company
Regulating Act	Governed by the Indian Partnership Act 1932	Governed by the Companies Act 1956.
Number of members	Minimum: 2 Maximum: 10 for banking business and 20 for other businesses	In case of a private company: Minimum: 2 Maximum: 50 In case of a public company: Minimum: 7 Maximum: No limit
Liability	Partners have unlimited liability.	Shareholders have limited liability to the extent of the unpaid amount on the shares held by them.
Management and control	Management and control are shared by partners.	Management and control lie in the hands of the managing director.
Formation	Easy to form, as there are no legal formalities.	Difficult to form, as there are many legal formalities.
Financial resources	It can raise limited financial resources.	It can raise a large amount of financial resources.