Tabulated below are the major differences of the financial statement of a Partnership and Limited Company:
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Partnership |
Limited Company |
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More than one capital account. The number of capital account depends on the number of partners in the Partnership concern. |
Shareholders fund which comprises many categories like share capital, retained earnings, other revenue and capital reserves. |
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Profit & loss is distributed to the partners’ capital account according to the agreed ratio. |
Unlike a partnership which has taxation on the individual partners, a limited company is imposed tax as it is a separate legal entity |
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The income statement of the Partnership shows a schedule on how the net profit/loss is distributed to the partners. |
Also, show a Statement of Changes in Equity where changes in share capital, profit, revenue and other capital reserves during the year. |
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The balance sheet shows the balance of the capital amount of each partner classified under owner’s equity. |
As shareholder funds |
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Besides the income statement and the balance sheet, a Statement of Partner’s Equity is also prepared to show the CHANGES in equity of each partner since the beginning of the year. |
Statement of Changes in Equity |
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