Distinguish between partnership firm and joint stock company is a basic issue in the business industry. People are different and they prefer various ownership methods as per their convenience. While partnership has many benefits, a joint-stock company also has its own set of advantages.

What is the difference between partnership firm and company firm?

While a partnership is a type of business that involves two or more individuals coming together to conduct businesses for profit, a joint-stock company is an incorporated association of shareholders, in which the individual stockholders own shares of the company. These individuals are called shareholders and they hold the right to vote for the management of the company. They are also liable for the debts of the company in the event that it fails to pay its bills.

In the case of a Joint-stock company, the personal assets of the stockholders are not at risk, as their liability is limited to the amount that they have invested in the corporation. The shares of the company are transferable and can be bought, sold or transferred between existing shareholders or to other prospective investors, unless restricted by the company’s articles of incorporation.

A Joint-stock company can raise capital through the sale of shares to the public, whereas the partners of a partnership firm may only be able to raise funds through their contributions. A Joint-stock company can sue and be sued in its own name, while a partnership does not have this option. A Joint-stock company can have a continuous existence, while the partners of a partnership are dependent on the terms of their partnership agreement.