Help required to decide for Firm or Company

This query is : Resolved

CMA Kalyan (Querist)
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10 June 2008 Hi
I am considering 2 opportunities for developing my stock trading.
1. starting a firm
2. starting a company
I would like to know about the consequences of Incometax for both the situation.
In general for an average holding of Rs.5 lac, which one of the above option is better.
And one more question In Incomtax, how deparment will measure a firm or companies trading? on turnover ?
Its difficult right?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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05 April 2012 As far as taxation is considered, both are taxable at a flat rate of 30%.

However, a company has to mandatorily get its accounts audited.

On the other hand a firm is required to get its accounts audited if its turnover exceeds the specified limit.