Difference between partnership and sole proprietorship
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The most obvious difference between partnership and sole proprietorship is the number of owners the business has. "Sole" means one or only, and a sole proprietorship has only one owner: you. Conversely, it takes two or more to form a partnership, so this type of entity has at least two owners. It's as simple as that.
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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.
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