DD: Company Law II - Differentiations

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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.

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