A partnership and a public limited liability company (PLLC) are two distinct forms of business entities. Let\’s understand each of them separately:
Partnership: A partnership is a type of business structure where two or more individuals or entities come together to carry on a business for profit. In a partnership, the partners contribute resources such as capital, labour, or skills and share in the profits and losses of the business. There are several types of partnerships, including general partnerships and limited partnerships.
In a general partnership, all partners have unlimited personal liability for the debts and obligations of the partnership. In a limited partnership, there are general partners who have unlimited liability, and limited partners who have limited liability up to the extent of their investment. Partnerships are typically governed by a partnership agreement that outlines the rights, responsibilities, and profit-sharing arrangements among the partners.
Public Limited Liability Company (PLLC): A public limited liability company, also known as a public LLC or PLC, is a legal business entity that combines features of a limited liability company (LLC) with the ability to offer shares to the public.
A PLC has a separate legal existence from its owners (known as shareholders or members) and provides limited liability protection to its shareholders. This means that the shareholders\’ personal assets are generally not at risk beyond their investment in the company.
PLCs issue shares to the public and is usually subject to more regulatory requirements, including financial reporting, compared to other business structures. They are often listed on stock exchanges, allowing their shares to be publicly traded as a partnership and a public limited liability company
In summary, a partnership is a business structure where two or more individuals or entities join together to carry on a business, whereas a public limited liability company (PLLC) is a legal entity that offers shares to the public, providing limited liability protection to its shareholders.
DIFFERENCES BETWEEN PARTNERSHIP AND PUBLIC LIMITED LIABILITY COMPANY
|Features||Partnership||Public Limited Liability Company|
|1||Legal entity||It has no separate legal entity||It has separate and distinct legal entity|
|2||Liability||It has unlimited liability||It has limited liability|
|3||Membership||It has a minimum of two and a maximum of twenty||It has a minimum of seven and no maximum limit|
|4||Ownership||Governed by a memorandum of association as they are incorporated||This can be done through the issuance of shares to the public.|
|5||Formation||Rights are regulated by deeds of partnership as they are not incorporated||The law prescribes an annual audit and publishing of accounts.|
|6||Auditing||No audit of account||The company enjoys perpetual existence|
|7||Perpetuity||Death or withdrawal of a partner can bring it to an end||Ownership is separated from as it is owned and contributed by as it is owned by shareholders and controlled by a board of directors.|
|8||Raising of capital||This is done through member’s contribution||This can be done through issuance of shares to the public.|