TYPES OF PARTNERSHIP FIRMS
1. PARTNERSHIP AT WILL
There can be two kinds of partnership firms, namely 1. A general partnership ,2. The limited partnership in the general firm, all partners have unlimited liability. Partnership as will, particular partnership and joint ventures are the examples of general partnership but in the limited firm, all partners except one may have limited liability, in other words, at least one partner must have unlimited liability in a limited partnership.
A brief description of various kinds of given below :
1. PARTNERSHIP WILL: When a partnership is formed to carry on business without specifying any period of time, it is called partnership at will. Such a partnership can continue for any length of period as long as the partners are willing to continue as the partner. It can be dissolved if any partner serves notice to the firm withdrawing or terminating his partnership.
2.PARTICULAR PARTNERSHIP: A partnership established for a stipulated period or the completion of a specified venture comes to an automatic end with the expiry of the stipulated period or on the completion of the specified venture , as the case may be.
3.JOINT VENTURE: It is organised for completing a specific project during a certain period. All the members of the joint venture are personally liable for its debts and obligatiuons , but they do not have general agency rights. The rights of the members of a joint venture are defined by the agreement . However, a joint venture is not affected by the death of a memeber . No member can withdraw his membership from the joint venture as divided among the members in a ratio agreed upon by the members in advence .
DISTINCTION BETWEEN COMPANY and PARTNERSHIP
|1.Regulating act||Indian Partnership Act ,1932||Companies Act ,1956|
|2.Number of members||Minimum-2
Maximum-20, in ordinary business and 10 in a banking business
|Private company –
Public company –
Maximum-authiorised capital divivdend into the number of shares.
|3.Entity||No separate legal entity from that of its partners.||The separate legal entity from that of its members.|
|5.Management||Not all partners are entitled to participate||Only members of the board of directors are entitled to manage.|
|6.Transfer of interest or shares||Not possible wwithout the consent of all the partners.||Freely transferable except in case of private companies|
|7.formation||No legal formalites .it may or may not be rigestered.||Only after fulfilling legal formalities .incoproration is a must .
|8.Regulation of working||No statutory regulation in day to day working of the company.||Has to comply with various statutory re quirements and submit numerous returns to the government.
|9.Stability||Unstable life- comes to and end with the retirement,, death or insanity of a partner||Perpetual life unaffected by the death , separation, insolvency, of the shareholders|
|10.Audit of accounts||no obligatory||legally compulsory|
|12.Winding up||Can be dissolved at will without any legal formalities||Cannot be wound up at will. winding up regulated as per provisions of the compaanies act .|