The Difference Between Partnership and Joint Stock Company

The Difference Between Partnership and Joint Stock Company

A partnership firm is a business with two or more persons who share the profits and losses of the company in an agreed ratio. They also share the liability of debts and obligations of the company as per their contribution in the form of capital. It is also a legal entity and can own assets as well as sue or be sued. A partnership can continue forever or until dissolved by the functioning of the law. The death, retirement or bankruptcy of a partner can lead to the end of the partnership.

What is the difference between partnership and share company?

Difference between partnership and joint stock company is a more modern format that is similar to the modern corporation, S-corporation or LLC. It is a company that distributes ownership by shares that can be bought and sold freely. This allows a company to raise money from investors that it might not be able to get with a traditional partnership or sole proprietorship. This shareholder model also gives the company a tax advantage because profits pass through to shareholders and are reported on their personal tax returns.

The main difference between a joint-stock company and a partnership is that a company has a separate legal status apart from its shareholders. It is an entity that can own assets and is liable to itself for debts and obligations. In contrast, a partnership does not have this separation and is dependent on its partners for running the business. This is why most businesses are structured as companies rather than partnerships.

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