Difference between Partnership Company and a Pvt Ltd Company

First off, there is no such thing as a partnership company; there is only a partnership firm.

A partnership firm is a business entity where two or more individuals come together to collectively run a business and divide profits among themselves. Such an entity is not separate from the individuals and is registered under the partnership act. As a partner at a partnership firm, you have:

  1. Powers to make decisions after consulting with your co-partners.
  2. Based on how much money you’ve invested; you can play the role of a leading partner.
  3. Unlimited liability of your firm. Any loss suffered by the firm will be the loss of your personal assets as well.

To tackle with the downfalls of a partnership firm, a pvt ltd company was introduced. A Private limited company also is run my two or more individuals, but these individuals are called directors. A private limited company also needs shareholders. Now, the directors can themselves play the role of shareholders or they can bring someone else aboard. As the director of a private limited company, you have:

  1. Power to make decisions after consulting your co-directors and/or shareholders.
  2. Power to keep your financial performance hidden from the general public.
  3. Power of limited liability, where your personal assets are safe in the event of loss

The above is the basic difference between a partnership company and a private limited company.

Also read about: one person company registration in Delhi

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