what is the difference between firm and company?

Answer 1

In Indian context, the legal difference is as follows:

1. A firm is an entity owned by one or more persons where as a company compulsorily need to have atleast two persons in case of Private Limited and atleast Seven persons in case of Public Limited. Example are Proprietary and Partnership firms vis-a-vis private of public limited companies incorporated under the Companies Act, 1956.

2. A firm may or may not be a registered entity whereas a company has to be registered with jurisdictional Registrar of Companies.

3. A firm can't use the suffixes like Private Limited or Limited after its name whereas a company has to use them, as the case may be - with some statutory specified exceptions.

4. So far in India, all firms have unlimited liabilities whereas companies are limited liability entities carrying the word Limited at the end of their name. However very soon, India may have LLPs as an Act to this effect is in the offing.

5. For Income tax purposes, firms do have different treatment for their profits in the hands of their owners whereas in company structure, such tax treatments are altogether different.

6. Provisions of Wealth Tax apply differently to firms and companies.

7. In firms, ownership normally holds management whereas in companies, they are divorced - atleast prima facie

8. 9. 10. ........

These differences should be enough for the time being!

Answer 2

In general, no differnce.
Company is a firm regd. under Companies Act
Firm means any business - regd. or not regd. I have 20 firms. You can open firm at any time without legal problems. There can be 20 firms in same name like Toys Shop, Agarwal Sweet Corner. Any tom and herry can open firm. Sweeper can open Agarwal Sweet Corner. There can not be 2 Co. of same name. Firm can be regd. under various Acts.

Answer 3

Firms are association of two or more persons who enter into an agreement to work and share profit as specified in the agreement. Their capital is also specified in the Agreement. Partners are liable for acts of other partners also. Their liablity is unlimited. Professional Institutes like Institute of Chartered Accountants/Institute of Company Secrearies of India etc. prohibit partnership of two members ofprofessional institutes. But now a bill for Limited Liability Partnership is on its way which will take care of draw backs of Partnership Act and will be very useful in the coming global trade scenario.

A company ( pvt. ltd and public ltd.(further listed on Stock Exchange or unlisted)) is governed by Companies Act, 1956, as amended and the liability of its members i.e. shareholders is limited to the extent of capital contributed by them by way of subscribing to number of shares. It is a separate entity apart from the shareholders and hold property in its own name, can sue and be sued in its own name and a common shareholder is not affected by the cases against the Company except financially to the extent of his share at the time of winding up, in the Company. Companies are governed by compliances laid down in the Companies Act and Registrar of Companies in every state takes care that the Companies Regd with them comply with provisions of Companies Act, 1956, as amended.

Companies are a better form of entity for doing business.

Answer 4

The words organization and agency would properly be utilized interchangeably. although, organization is diverse. organization is a extra physically powerful organization that often do quite a few diverse companies and often has some subsidiary companies. while you're writing an essay or term paper and additionally you're undecided concerning the scale of a agency, you are able to purely call it organization.