Differences between Sole Trader and Partnership

Sole Trader vs Partnership

The following are some of the differences between a Sole Trader and Partnership.

Sole Trader vs Partnership

Sole Trader vs Partnership

Point of DifferenceSole TraderPartnership
1. Legal FormalitiesNo legal formalities have to be followed for starting the business.Few legal formalities to be followed for starting the business.
2. LegislationIt is not controlled by any legislation.It is regulated by Partnership Act, 1932.
3. No. of MembersIt is totally one man's business.There should be atleast two members. Maximum number of members is 20 in case of general business and 10 in case of Banking business.
4. AgreementIt does not require any agreement as there is only one member.Agreement or Deed either in writing or oral is necessary.
5. SecretsBusiness secrets can be maintained.Business secrets cannot be maintained.
6. CapitalSupply of capital is limited.More capital can be secured.
7. DecisionThere is no delay in making decisions.There might be delay in taking decisions due to difference of opinion among partners.
8. RiskRisk to be totally borne by one person.Risk is to be shared among the partners.
9. ManagementInefficient management due to limited supply of skills.Collective skill of partners leads to efficient management.
10. Continuation of businessLack of children may lead to discontinuation of agreement.Partnership can be continued by renewal of agreement.
11. Distribution of profitProfit or loss belongs to the single owner.Profit or Loss is divided among the partners.

Leave a Reply

Recent Posts


Related pages

establishment of gattadvantages of e commerce to customersbank eximterminal digit systemdecentralized procurementasset utilization ratiosperpetual inventory system meaningwhat is monetary policy of rbiadvantages of debenturewhat is high labour turnoversales manager duties and responsibilitieswhat is the meaning of stratified samplingautocratic leadership style definitionadvantage of absorption costingsole trader definition businessdefinition consumerismadvantages and disadvantages of a sole proprietordefine the term urbanisationadvantages and disadvantages of centralized and decentralized purchasingprofitability index calculator financialadvantages of capitalism and socialismwhat is cash operating cycledifference between formal and informal communication ppttraditions online bankingproximate cause in marine insurancedisadvantages of fdiadvantages of periodic inventory systemconsumer co-operativesamalgamated companies listadequacy of working capitalequity share capital and preference share capitalultra vires dividendsprocess costing calculationelements for a valid contracttax avoidance indiambo controlpayback method of capital budgetingoverhead distribution cost accountingformula for acid test ratiocomputation of payback periodexample of imputed costdefine economic order quantitydebentures and its typesmeaning of labour turnovermarketing middlemendisadvantages of imfpayback period formula examplereorder stock levelperil and hazard in insurancedisadvantage of joint stock companyfdi pros and cons in indiacapex plansbatches meaningwhat are the characteristics of a capitalist economywhat is the meaning of vouchingcapital gearing meaningdso collectionsadvantage and disadvantage of sole traderskimming strategy marketingimf rolesdeductive vs inductive methodstock market scams in india pdftrade associations and regulatory bodies definitiondisadvantages of tqmhow do you calculate stock turnoverlist of venture capitalists in indialist of depository participants in indiainsurable meaningrole of international monetary fund in developing countriesperpetual inventory system meaningadvantages and disadvantages of quota sampling methodbreak even ebitwhat is voluntary winding uptop 10 businessmanhow to calculate a payback periodpayback ratiowhat are the advantages and disadvantages of sole proprietorshipqouta samplingfunction of wholesalersample of negotiable instrumentdematerialised shares meaningautocratic meanswhat is irda in insurance