Distinguish between the sole Trading concern and partnership firm.
Answers
Sr. No Basis Difference Sole Trading Partnership Firm
1. Meaning Owned and controlled by only one person Two or More persons come together for partnership firm
2. Formation Sole trading can be formed by any one at any time Partnership firm can be formed by an agreement between two or more persons
3. Ownership Only one person can be owner Partnership firm owned by two or more and maximum 10 in banking and 20 in other firms
4. Registration Registration is not necessary Not necessary but useful [compulsory in Maharashtra]
5. Secrecy Maximum Secrecy Partners share secrecy
6. Managerial Management lies on owner Contributed among partners.
7. Capital Amount of capital is very small Capital is high as partners contribute.
8. Profit and Loss Proprietor himself receive all profit and loss. profit and loss are shared by partners.
Sole trading concern:
The business which is started, capitalized and accomplished by a single person is called sole trading concern.
A sole trading concern is the initiatives which are invested and accomplished by a single person. In this business, sole-manager takes all risk and accountability of business.
Partnership firm:
A partnership firm is an association which is formed with two or more persons to run a commercial with a view to earn profit. Each member of such a group is recognized as partner and mutually known as partnership firm.
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