Difference between Joint Stock company and Partnership Firm
The difference between the Joint Stock company and the Partnership Firm is listed in the table below:
|Basis of Difference||Partnership Firm||Joint Stock Company|
|Number of Members||Minimum number of Partners can be 2, and no restriction for the highest number||Private: minimum 1 and maximum 101
Public: the minimum number is 7 and there is no limit for maximum.
|Formation||Partnership business can be formed according to Partnership Act 2020 BS and the agreement between the partners.||JSC shall be formed under company act 2063 (Amendment 2074). Joint stock company requires more legal formalities, capital and time for incorporation than partnership.|
|Liability||There is unlimited liability in partnership business||Liability of the shareholders limit up to their capital investment i.e. face value of the share.|
|Transfer of Share||Partners can't transfer share without mutual consents (Agreement) of the other partners.||Public Company: Shareholders can transfer their share to anyone without any consents of other shareholders.
Private Company: They can transfer their share to other partners or outsider only after they get the permission/approval from other shareholders.
|Secrecy||Partnership form are not bound to publish their financial statement (Information) publicly. They can keep secrete||It has to make its account public. Thus maintaining confidentiality in business transaction is difficult.|
|Existence/Certainty||Its existence depends on the continuation of the partners in the business.||The existence of a company is independent to the continuation. Its existence is not affected by the abandonment of its shareholders with any of the reasons like death, insolvency or withdrawal.|
|Legislation/Act||it is registered or renewed under the partnership act 2020.||This company registered/renewed/governed under the company act 2063.|
|Management||The partners may manage a partnership firm||Representative of Shareholders manage the business/organisation.|
|Area of Activities||This type of business are smaller than the joint stock company.||These company are bigger in every aspect of business (Resources, size, management and area of operation).|
|Dissolution||Partnership Firm will generally terminate under the collective consent of the partners. The partners can include the term and procedure of the business termination in their partnership deed (Agreement)||Dissolution of a joint stock company is possible only through legal proceedings. It must follow the lengthy legal procedure which is costly and time consuming.|