Compare a partnership and a public limited company as business unit under the following headings;...
COMMERCE
WAEC 2008
Compare a partnership and a public limited company as business unit under the following headings;
(a) formation
(b) ownership
(c) raising of capital
(d) liability
(e) transfer of shares
Explanation
| Partnership | Public limited company | |
| Formation | it is simpler, not requiring lots of documentation. It is cheaper and easier to form. It requires deed of partnership. | Cumbersome, requiring lots of documentation and article of association to secure incorporation. It is expensive and takes time to form. It is owned by shareholders through subscription of shares. |
| Ownership | It is owned by the partners ownership is not separated from the management | Owners are separated from management of the business |
| Raising of capital | Capital is raised through the funds contributed by partners | Capital is raised through subscription of shares |
| Liability | The liability of each partner is not limited | The liability of each partner is limited to the amount invested |
| Transfer of shares | Partnership does not deal with shares, so nothing to transfer. | Shares are transferable from one shareholder to another on the stock exchange market |
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