We can distinguish between partnership and joint stock company by the following ways :1. Formation :-
Partnership : It is formed by a written agreement.
Joint stock company : It is formed under the company ordinance.
2. Members :-
Partnership : Minimum 2 and maximum 20 members in the partnership.
Joint stock company : It has shareholders.
3. Liability :-
Partnership : The liability of each partner is unlimited if it is not specified in the agreement.
Joint stock company : Shareholders liability is limited only to the value of the shares.
4. Financing :-
Partnership : Generally partners contribute the fund.
Joint stock company : It issues ordinary paid up shares to collect the capital. It can also borrow from banks.
5. Tax :-
Partnership : Each partner of the registered firm will pay tax individually.
Joint stock company : The company is subject to double taxation.
6. Management :-
Partnership : In this case managerial functions are shared by partners according their mutual agreement.
Joint stock company : Shareholders elect the board of directors and board appoints the experts for each department.
7. Control :-
Partnership : All the decisions are made with the consultation of all the members.
Joint stock company : The board of directors controls the affairs of the business.
8. Dissolution :-
Partnership : It can be dissolved with the mutual consent of the partners. It may be dissolved if any partner dies retires or become insolvent.
Joint stock company : ( 1 ). It can be dissolved by court. ( 2 ). With the approval of majority share holders. ( 3 ). If corporate charter expires. ( 4 ). It can be dissolved by the state due to misuse of powers.