Differentiate between Sole trading concern and Partnership firm. |
|
Looks like you have not signed up yet. Please sign up now to view the answers without interruption. Redirecting in 60 seconds... |
| Ans : The difference between sole trading concern and partnership firm are as follow:
Basis
Sole Proprietorship
Partnership
Number of Members
It is established and controlled by only one person.
It is established by minimum two or more person’s.
Agreement
It is not necessary to come into an agreement with other person for sole proprietorship business.
An oral or written agreement among the partners about the various terms and conditions of business is essential in partnership firm.
Investment capital
A single proprietor invests capital for the operation of business according to his scope.
Two or more partners invest capital for the operation of business.
Making decision
The owner has full control over his business. So, he is able to take decision promptly.
All important decision are taken by consent of all partners. So, it is time consuming process.
Secrecy
A sole proprietor can keep all the internal matters of the concern secret within himself.
Partners can keep all the internal matters of firm secret within themselves.
Management
It is managed by a single proprietor according to his knowledge and skills.
It is managed by some or all the partners on the basis of mutual agreement.
Risk bearing
A sole proprietor has to bear all risk and responsibility of the concern himself.
All the partners have equal interest in the firm. So, they share risk and responsibility of the firm.
Share of Profit
All the profit of the concern is taken by the proprietor himself.
Profit of the firm is shared by the partners on the basis of agreement.
|
|
Did you find this answer useful?
Then Register Now to view other answers easily. |