Give the difference between sole proprietorship and partnership
Answers
Answer:
Sole proprietorship is a business carried out by a single person whereas partnership is a mutual agreement between two or more persons who have agreed to share profits carried out by all or anyone acting for all.
Explanation:
Answer:
proprietorship :
(1) A firm run by only single individual and he is the sole owner of the firm.
(2) There is no specific governing law.
(3) There can be only one member.
(4) Proprietor has to borne liability alone.
(5) Proprietor is the sole decision maker ; hence decision can be taken quickly.
(6) Profit is solely earned.
(7) Proprietor is the only source of capital.
(8) It is less credible.
partnership :
(1)A firm started by two or more partners with the aim to earn profit is known as a partnership firm.
(2)It is govern by the Indian partnership act.
(3)There must be minimun 2 and maximum 50 partners.
(4)The liabilities will be shared among partners.
(5)Approval from all or majority of the partners is necessary as per the agreement ; hence there may be delayed decisions.
(6) Profit is distributed among partners.
(7) Capital is brought by all the partners.
(8) It is more credible as compared to proprietorship firm.