WHAT IS PARTNERSHIP?

WHAT IS A COMPANY?
WHAT IS DIFFERENCE BETWEEN
BOTH?
REGISTRATION OF PARTNERSHIP &
COMPANY.
PRESENTED BY
 AROOJ FATIMA
 SAVEEZA KABSHA
 SANA ZEB
AROOJ FATIMA
 SABA SALEEM
SAVEEZA KABSHA
 ANUM
SANAJARRAL
ZEB
SABA SALEEM
ANUM JARRAL
WHAT IS A PARTNERSHIP
INTRODUCTION
 Partnership
Relation between two or more persons to share profit

 Partner
Those who enter into partnership

 Firm
The name under which their business is carried
TYPES OF
PARTNERSHIP
 General partnership
 Limited partnership
 Limited liability partnership
 GENERAL PARTNERSHIP
 Introduction

Two or more persons

Each is liable for debts or judgments
No limited liability
Any partner can bind the entire business to a contract
Profits are shared equally
 Advantages

Trouble-free and economical

You don't have to record with your position and compensate a fee
 Disadvantages

Partners may have dissimilar apparitions or aims for the business

Uneven obligation
Individually responsible for business debts and liabilities
LIMITED PARTNERSHIP
 Introduction

Restricted in management
Only responsible for the venture in the partnership
 Advantages

It can benefit from a quantity of repayment with a limited partnership

Can contribute to in the incomes with a least amount of Endeavour
Shielded from the widely held of the liability and other authorized issues
Boundaries the liability of limited partners to the quantity of capital they've
invested
 Disadvantages

Bounded in the task she can take part in the running of the corporation
Danger of taking on the liability of a general partner
LIMITED LIABILITY
PARTNERSHIP
 Introduction
One associate is not in charge or responsible for another partner's
wrongdoing or carelessness
 Advantages

It is not unexpected
Each associate is in charge only for the quantity of money he has given
Each one of the partner is not "individually accountable”
 Disadvantages

Many limits
Some states put a ceiling on what career may structure this
WHAT IS A COMPANY
 INTRODUCTION
 Company
Created by law
Artificial person
Has legal rights and obligations in the same way that a natural person
 Lord Justice Lindley:

A company is meant an association of many persons

who contribute money or money’s worth to a common
stock and employ it in some trade or business, and who
share the profit and loss arising there from .
 TYPES OF COMPANIES
Public Limited Company
 Legal existence is separate from its members
 7 to unlimited members

Private Limited Company

 More than 2, less than 50 members
 Liability is limited or unlimited

 LIMITED BY SHARES
 LIMITED BY GUARENTEE
 UNLIMITED LIABILITY
DIFFERENCE BETWEEN
Meaning Two or more persons Association of

agree to carry on a persons who invests

business and share money towards a

the profits & losses common stock, for

mutually carrying on a business

and shares the profits

& losses of the

business

Prevailing law The Partnership Act, 1932. Companies Act 1956

Registration Optional Obligatory

Creation Mutual agreement Incorporation under

between the partners the Companies Act

Distinct entity No Separate legal entity

under law

Minimum Two Two in case of private

number of company

persons Seven in case of

public company.
Maximum Twenty 50 in case of a

number of private company

persons Unlimited in case of

public company

Liability Limited Unlimited

Contractual Cannot enter into Company can sue

capacity contract in its own and be sued by its

name own name

Minimum capital No such requirement 1 lack in case of private

company and 5 lack in case

of public company

Charter Document Partnership Deed is a Memorandum and Article of

charter of the firm which Association is the charter of

denotes its scope of the company that defines

operation and rights and its scope of operation.

duties of the partners

Ownership of Partners have joint The company have

Assets ownership of all the assets ownership of assets

Rights/Duties of Governed by Partnership Governed by AOA and

the Partners Deed. resolution passed by

shareholders or directors.

Liability of Unlimited. Partners are Generally limited to the

Partners/Members severally and jointly liable amount required to be paid

for actions of other partners up on each share.

and the firm and liability

extend to their personal

assets.

Principal/Agent Partners are agents of the The directors act as agents

Relationship firm and other partners of the company and not of

 REGISTRATION OF
FIRM
When a partnership or company
must be registered
 Not necessary to register a partnership of
less than twenty members
 Section 58 of Partnership Act 1932

 Essential to register a company, association or

entity formed of more than twenty persons
 Section 9 Obligation to register certain associations,
partnerships as companies
 WHEN MUST A PARTNERSHIP
OR A COMPANY BE
REGISTERED
 Registration of Company
 Companies Act, 2017
 Section 9
 Obligation to register certain associations,
partnerships as companies
 Registration of Partnership
 Registration of partnership is not necessary in
Pakistan
 Law confers some benefits if it is registered
 Partnership Act, 1932
 Section 69 - EFFECT OF NON-REGISTRATION
HOW A PARTNERSHIP OR A
COMPANY IS REGISTERED
 SECTION 58 OF THE PARTNERSHIP ACT
 Firm name
 Place of business of firm
 Name of other places
 Date of joining
 Name and addresses of partners
 Duration and object
 Registration by registrar
 Entity of the statement
 Received in the register of firm
HOW A PARTNERSHIP OR A
COMPANY IS REGISTERED
 Company name availability
 Company name reservation
 Memorandum of article
 Article of association
Form 1
Form 21
Form 29
CASE LAWS
 MOLLOW, MARCH & CO. V COURT OF WARDS
Hindu Raja advanced some loan to a British firm
Which later entered into a contract with the plaintiff.
Raja was given the power to control the business and to get
commission on profit till debt is discharged
Raja never exercised control
The plaintiff sued the firm and Raja together for failing to perform the
contract as partners
Raja held not liable
POOLEY V DRIVER
(1876)
Pooley advanced 2500 pound to A and B.
C was entitled to inspect and take copies of the
partnership book and a part of annual profit, final
account and repayment at the end of the partnership
unless it should appear that C has received more than
the money C has given
D also advanced to A and B on the similar terms
Held that there exist a partnership and the money
was not given as loan but towards capital contribution
in the firm.
 Parkyns agreed with the Ross that accounts
are to be carried in defendant’s name as
agent.
In return he was to get a fixed sum as
salary and 1/5th part of the profit.
Ross v The loss was to be borne by the defendant.
Parkyns Further, in any year after division of profit if
an unexpected claim is made, the plaintiff
(1875) was supposed to pay his share of the same
but that would not exceed in any
circumstances from the money he has
received as his share of profit.
Held, there was no mutual agency hence no
partnership.
HOLME V HAMMOND
(1872)
5 persons entered into partnership for 7 years
Agreed to share the profits and losses equally
Agreed that if any one of them died before the expiry of the
said period the others would continue the business and pay
the share of profits of the deceased to his executors.
Executors of the deceased were paid 1/5th share of the profit.
Plaintiff sued the partners and executors as partners in the
firm.
Held; Executor is not partner