Company Law II: Differentiations

Company vs Partnership

Company	Partnership
Distinct legal person	Not distinct from persons who compose it
Property belongs to company	Property belongs to partners
Creditors can proceed against company only	Creditors can proceed against partners
Members not agents of the company or each other	Partners agents of the company and inter se
Member of company can contract with firm	Partner can’t contract with his firm
Shares freely and ordinarily transferable	Partner can’t transfer shares without consent of other partners
Restrictions in articles bind the public	Restrictions on partner’s authority in partnership contract don’t bind outsiders
Liability limited by shares or by guarantee	Unlimited liability
Perpetual succession	Death or insolvency of partner dissolves firm unless otherwise provided
Any number of members. Private co – 2 – 50 members. Public company – min. 7 members	Can’t have more than 100 members
Legally required to have account audited annually.	Audited at partners’ discretion

Company vs LLP (Limited Liability Partnership)

LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. It can continue its existence irrespective of changes in partners and is capable of entering into contracts and holding propety in its own name. Has SLP.
Basic difference between the two lies in the fact that the internal governance structure of a company is regulated by the Companies Act, whereas for a LLP it would be by contractual agreement between partners.