Distinction between Company and Partnership

Many proposed start-ups find it difficult to decide whether to incorporate a company or a partnership concern. Understanding the differences between the two would solve this problem. The major difference between companies and partnerships may be considered under the following headings: Formation:-A company is incorporated by registration under the Companies Act, 1956.-A partnership is established by agreement which may be expressed or implied from the conduct of the partners and is subject to the Indian Contract Act, 1872 or the Indian Partnership Act, 1932. No special forms are required, though partnerships articles are usually written. Status at Law: - A company is considered to be an artificial legal person with perpetual succession. Thus a company may properly, make contracts and sue and be sued. It is an entity distinct from its members.-A partnership is not a legal though it may sue and be sued in the firm's name. Thus the partners own the property of the firm and are liable for the contracts of the firm jointly as well as severally.