Agriculture is the main industry in India. After the Industrial Revolution called Industrialization, various types of business projects were launched. Based on this, the public sector undertakings of the state are providing services to the people in various categories including transport, production and sale, export and import, use of natural forces, construction works, and road development. In particular, the contribution of the private sector to the country’s GDP, employment and exports to other countries is one of the most essential. Based on that, it provides services in various sectors such as manufacturing, marketing, marketing and export-import with the permission of the government, from an individual company to a joint venture of various individuals. Read more to know the advantages of incorporation and other differences.
Types of companies
Such private companies operate in various forms as sole proprietorships, sole proprietorships, limited liability partnerships, limited companies, and firms, which can be called firms. In view of the growth of the private sector, the Central Government has been providing various incentives to entrepreneurs such as infrastructure facilities, road facilities for freight arrangements, online applications for business licenses and expedited licensing.
According to a recent statistic, there are 19,89,777 registered companies operating in India. Apart from them, there are millions of organizations operating as small businesses. Millions of people meet their daily needs on the basis of employment and service provided by the companies concerned. An investor who wants to start his own business needs to know the definitions for existing businesses in India. Based on that you can see the definitions for different types of private companies here.
Differences between firm and company
There are differences between a firm called a Firm and a company called a Firm. Information about them can be found below.
- The firm is registered at the Indian level under the Partnership Act 1932. The company is registered under the Companies Act 2013.
- The firm can be registered if desired. However, the company must be registered.
- Annual auditing, ie auditing, is not required by the firm. However, auditing is mandatory for a company.
- The ownership of the firm is vested in its shareholders. The ownership of the company is vested in its directors, directors.
- A firm called a firm is considered by law to be a joint venture with its shareholders. But, the company will be seen as different from its directors.
- The firm may be dissolved after the death of one of its shareholders. But the company can only be legally dissolved.
- The firm does not make arbitrary agreements with third parties. Therefore, the level of susceptibility to lawsuits does not develop. However, as a company, it may sue in court or may be sued by another third party.
- The minimum investment for a firm called Firm has not been determined. But the minimum investment for a private company is set at Rs 1 lakh and the minimum investment for a public company is set at Rs 5 lakh.
- The firm may have a maximum of 100 shareholders or members. However, it has been decided that if it is a private company it will have a maximum of 200 members and if it is a public company it will not have a maximum membership limit.
Differences between Partnership and Company
- Members of the Partnership Organization will be referred to as Partners. Members of a company are referred to as shareholders.
- The partnership is registered under the Indian Joint Venture Act 1932. The company is registered under the Indian Companies Act 2013.
- A partnership is a contractual agreement between two or more persons. The company is registered under the law.
- The partnership is determined by state law. But the company is determined by the legal ethics of the federal government.
- The partnership is not an individual separation from its partners. That is, the view of the law is that the partners and the partnership organization are one and the same. But the company is viewed as a personal entity by its members.
- The partners of the partnership organization cannot enter into any agreement with that organization. But a member of a company can contract with that company.
- A partner in a partnership organization can trade as an agent with other companies on behalf of that organization. However, the shareholder of a company cannot act arbitrarily in such trading activities.
- The partnership is Unlimited Liability. However, the company’s shareholders will have limited liability.
- The partnership does not have to be sealed by law. But, the company needs a seal of its brand.
- The partnership is managed by its shareholders. But, as a company, its board of directors oversees management.
- Judgment against parolees in the partnership system can be provided by law. However, it is not possible to issue a judgment against the company’s shareholders.
- Private companies are referred to as Private Limited and Public Enterprises as Limited. But no such reference is made to the term partnership.
- Accounting cases for them in partnership organizations will be made on the basis of the partnership agreement. But as a company, its accounting cases can only be viewed and approved by a registered Chartered Accountant.
- A name change for a partner organization is one in which the name change can be easily completed after negotiations between the partners. But changing the name of the company is not an easy task. It requires the formal approval of the Central Government.
Differences between Partnership Organization and LLP
The partnership called the Business Federation is one of the oldest. However, LLP, ie Limited Liability Partnership, is a business and industry practice that has been developed in recent times to adopt modern concepts.
- The partnership is registered under the Partnership Act of 1932. However, LLP stands for Limited Liability Partnership under the 2008 Act.
- Registration for a partnership company will be done in accordance with the relevant state registry laws. However, the registration for LLP, ie Limited Liability Partnership, has to be done under the Central Ministry of Industry.
- Partnership companies are not viewed differently from their shareholders. It is therefore assumed that they have indefinite responsibilities. However, in a Limited Liability Partnership, the company and its shareholders are viewed as personal. It liaises with the company concerned on the basis of the liabilities and investments defined by the shareholders.
- A partnership is a partnership of at least two people and a maximum of 20 people. Minor partners are also allowed to participate in those partners. However, as a Limited Liability Partnership, you can include a minimum of two people and a maximum of as many people as you want. Also, Minor Partnership in Partnerships will not be accepted. In particular, it is necessary to select two persons as designated partners for designated practices as designated partners.
- The shares of the partnership company can be transferred to another with the formal consent of its shareholders. In addition, the transfer of shares to another name would be a lengthy process. Also, converting a partnership company into a Limited Liability Partnership or Private Limited is one of the most difficult. At the same time, the shares of a Limited Liability Partnership Company can be easily transferred to another person with the consent of the shareholders. But the holder of such shares cannot acquire the status of a shareholder himself. Further. A Limited Liability Partnership can be easily transformed into a Private Limited Company or another Limited Company.
- The partnership does not have to file annual accounting statements. However, in the case of a Limited Liability Partnership, it is imperative to file annual accounts with the Ministry of Industry.
- A partnership company will have a maximum of ten people allowed to destroy banking services and a maximum of 20 people will be allowed to provide other services. However, there are no such definitions as a Limited Liability Partnership.