Company as distinguished from other business enterprises

DETAILS

However, there are number of likeness between a limited company and other formation of relations, there are huge number of unlikeness as well. In both the actions individuals are the matters, and commonly trading is the object. In the below paragraphs, a limited company is differentiated from a registered society, a Hindu joint family business and a partnership firm.

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Difference between Company and Partnership

The major points of difference between a partnership firm and a company are as follows:

A company is a different legal person, but a partnership firm is not different from the several persons who create it.

In a partnership, the firm and its property of the distinct including it. In a company, it connects a company and not to the persons containing it.

In a partnership firm individual are creditors partners and an order against the firm can be performed against the partners severally and jointly. The individuals are not performed their members and they can manage only for their company.

 The company members are not an agent, but the partners are the agents of the firm. A partner can discard the property and sustain responsibilities as he proceeds in the process of the firm’s business. The company member not has any powers.  

A partner is not bond with his firm, but a company member can.

A partner is not making his shares to transfer and create the transferee of the firm member is without the acceptance of other partners. But normally a company’s share can be transferred.

Provisions on a partner’s rule included in the partnership agreement do not attach outsiders. Such rules registered in the articles are successful. Because the public are move to familiarize themselves with them.

A partner’s responsibility is always huge whereas that of shareholders may be restricted either by a guarantee or by shares.

A company distinguished has continuous succession, i.e. the failure of a shareholder or the death or all of them does not affect the company and their life. But the death or failure of a partner terminates the firm.

A company may have a greater number of members, but in private limited company that cannot have more than 50 members. There must not be less than 7 persons in a public company and only two persons in a private limited company. But a partnership firm includes only 20 members in any business. In the banking business only 10 members are required.

Legally a company is need  to audit his account annually by a chartered accountant (CA). But, in a firm the accounts are managed at the choice of the partners.

Difference between company and hindu joint family business

A company includes different members, but a hindu joint family business includes similar members. Since it contains joint family members itself.

The manager has the complete power of the Hindu Joint Family business to deal debts for business and other coparceners cannot perform on their own.

In Joint Hindu Family business, a person becomes a member of by their goodness of birth. It does not effect the company registration activities.

It is not mandatory for registration on carrying business for earn by a Hindu Joint Family still the members are increases to twenty.

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Difference between corporation and company

Commonly speaking an group of persons registered on the relevant law and covered with legal personality different from the persons is creating known as corporation. Both the words “corporation” or “body corporate” is used in the companies act 1956.

Corporation or body corporate contains a company registered outside India but does not have:

  • Any other body corporate is not being a company that the government may, by announcement in the Official Gazette, mention in this behalf.
  • A co-operative society registered on any law is describing to co-operative societies.
  • A corporation sole
The statement “body corporate” or “corporation” is wider than the word company.

A corporation sole id is for a particular one as represented as a corporation in favor of some consultant’s office who held function by him or executed by him. A bishop or crown under the English law are cases of this kind of corporation. It may be mentioned that though a corporation sole is rejected from the meaning for the reasons of the companies act.

A society is formed under the society registration act has been maintained by the supreme court in board of trustees v. State of Bangalore, A.I.R, 1962 S.C.458. But it is not come within the term ‘body corporate’ under the companies act.

An industrial society registered under industrial and provident societies act is not a company. The supreme court set down the core of a corporation. It contains:

  • Lawful control of registration
  • The persons to be registered
  • A name by which the persons are registered
  • A location
  • Words are comfortable in law to show registration
  • No specific words are important for the art of a corporation.

A society should not be compared as “body corporate” within the meaning of companies act 1956. However, such society can be named as a “person” having particular lawful body apart from the members creating it and makes a company member under section 41(2) of the act. A society registered under the societies registration act from the scope of the expression as “body corporate”.

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