Question

Comparison between sole proprietorship partnership and company

Answer 1

Sole proprietorship
A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of enterprise that is owned and run by one natural person and in which there is no legal distinction between the owner and the business entity.
Partnership
A partnership is an arrangement in which two or more individuals share the profits and liabilities of a business venture. Various arrangements are possible: all partners might share liabilities and profits equally, or some partners may have limited liability.

Company

A company is any entity that engages in business. Companies can be structured in different ways. For example, your company can be a sole proprietorship, a partnership, or a corporation. Depending on which different type of company you're dealing with, it may be owned by one person or a group of people.

Answer 2

PARTNERSHIP

• Governed by :- Partnership firm is governed by Partnership Act 1932.
• Number of members :- Minimum - 2 , Maximum - 50 in ordinary business and 10 in banking business.
• Risk :- Partners jointly bear the risk.
• Basis of formation :- Agreement called partnership deed.

SOLE PROPRIETORSHIP

• Governed by :- There is no separate act governing sole proprietorship.
• Number of members :- Only 1 member, that is owner.
• Risk :- Only proprietor bears all the risks.
• Basis of formation :- No agreement.