Question

compare and contrast sole proprietorship and partnership form of business

its a business law question

Answer 1

Sole proprietorship form of business have only one owner of the business on the other hand, Partnership business forms by agreement of two or more person involved to carry out business.

The owner of the sole properitorship is called sole trader or sole owner on the other hand individuals in partnership are called partners.

In context of liability, Sole properitor has unlimited liability because he is the only owner of business so he has to bear all of the liabilities arise out of business. On the other hand, partners under partnership share liabilities as per contribution made in the partnership.

Sole owner enjoys all the profit as well as bear all the risk in the business. on the other hand, Partners in partnership share profit and risk is shared among each other.

In sole properitorship the minium and maximum number of member is only one. Conversly, there are minimum two and maximum 100 members in partnership.

In sole properitorship, lack of resources and finance is faced by sole owner. on the other side, partners can raise capital and resources by including more partners in business.

The duration of sole properitorship is uncertain as it can run for many years or it can be closed in few days. On the other hand, Partnership duration depend on desire and competency of partners.

The common thing between both form is that sole owner as well as partner both do business for profit making generally.