Firm vs. Company - The Gray Area
company clat_ug intermediate definition_doubtI'm struggling to grasp the difference between a firm and a company in Company Law, and I'm not the only one. Every textbook talks about forms of business organization, listing company, partnership, proprietorship, and firm, but none really explain the relationship between firm and company clearly. A firm can be a partnership, but can a partnership be a firm? Isn't a partnership also a business organization? Someone please help me out with a real-life example or definition from Indian law that explains why these are treated differently.
2 Comments
Firm aur Company dono hi business forms hain, lekin kuch difference hain. Firm ek partnership ka naam hai ya ek proprietary concern ka, jo koi bhi owner ke name hai. Company, dusri or, ek separate legal entity hai, jo share jari karke public ya private ho sakti hai. Firm me ownership transparent hai, lekin company me ownership confidential rehta hai. Firm ki formation procedure company ki tarah kafi easy hai.
Agar aapko yeh difference clear nahi hai, to bas yeh dekhein. Firm ek partnership hai jo apne members ke nam se kaam karta hai, lekin company ek separate legal entity hai, jiske liye registration kiya jata hai. Firm ki assets aur debts partnership members ke nam ke hote hain, jabki company ki assets aur debts company ke nam ke hoti hain. Firm ka business risk partnership members par hote hain, jabki company ki business risk company ke assets par hota hai.