However, there are two among them that are suitable for almost any kind of business. One involves partners, and it’s called a partnership firm, and the other Is called a Pvt ltd company or a Private Limited company. Budding minds are still confused about which one to choose. Well, if you are one of them, yours will be long gone once you’re finished reading this article.
Despite the title of this article, there is no such thing as a partnership company, there is just the partnership firm. It’s a business entity that consists of two or more individuals coming together, agreeing to work in tandem towards generating profit. A partnership consists of:
Suited for all kinds of businesses, a partnership firm is amazing if you want to run a family style business.
A Private Limited Company is a business entity that, like a partnership firm, is run by two or more individuals. These individuals are known as directors. However, together, instead of a collective, they establish a separate legal entity known as a private limited company. A private limited company consists of both shareholders and directors. A private limited company consists of:
The difference between a partnership firm and a private limited company can therefore be condensed into the following points:
So, in the end, you might be facing the question, which one is better? Well, what are your preferences? Both of these have the ability to take your business upwards and make it sore. However, if you want a safer approach towards success, go with a private limited company.