The following
tabulated points are some of the distinctions between a registered and a
partnership business.
tabulated points are some of the distinctions between a registered and a
partnership business.
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Registered company
|
Partnership
|
|
Members
merely as such are not entitle to share in the management, which is delegated to a board of directors |
In the
absence of express agreement to the contrary, all general partners are entitled to share in the management |
|
The company is a separate legal entity from its members, and a member may
thus contract with or sue it. |
A
partnership is not a body distinct from its members, and a partner cannot contract with the firm or sue it. |
|
In a public company, the members may consist of 7 or more; and in a
private company, from 2 to 50. This maximum is exclusive of employees and ex-employees. |
No
partnership formed for the purpose of carrying on business or gain can be established if it consists of more than 20 persons. |
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Members as such have no power to bind the company.
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A partner is,
in the ordinary course, entitled to enter into contracts on behalf of the partnership firm. |
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The
liability of a member is limited to the amount (if any) unpaid on his shares or to the amount for which he originally agreed to be liable. |
Expect in
the case of a limited partner, the liability of partner extends not only to his share of the partnership assets but to his private estate as well. |
|
Profits not
distributed as divided cannot be added to the capital (expect where capitalized by the issue of bonus shares); and share capital can only be reduced after compliance with various statutory formalities. |
Subject to
any contrary agreement, a partner’s share of profits may be added to his capital. And his drawing may be deducted there from. |
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A registered
company is required by statute (CAMD 1990) to keep certain prescribed books of account. Sections 331 & 332. |
The books
account to be kept is a matter for the partners themselves to agree upon. |
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The accounts
must be audited annually. See section 357 of CAMD 1990. |
The accounts
are audited only if the partners so desire. |
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If the
company I limited, the audited account and directors report are open to public inspection. |
There is no such requirement, even in
respect of a limited partnership. |
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The company
can pursue only the objects for which it was formed. These can be extended only within certain limits. |
A
partnership may carry on any business upon which its members agree. |
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The company
continues to exist regardless of change in its membership by reason of death or transfer of shares, until it is wound up or struck off the register as defunct. |
The
partnership is terminated by the death of a partner. The introduction of a new partner constitutes the formation of a new partnership. |
