DIFFERENCE BETWEEN SOLE TRADING AND PARTNERSHIP

The difference between Sole trading and partnership are as follows:

Sole Trading Concern :

1. Membership : It is owned and controlled by only one person.

2. Agreement : The question of agreement does not arise.

3. Capital : Only the capital of one person is used in the business. Thus, it may suffer from shortage of capital.

4. Decision : The owners has full control over his business. So he is able to take decision promptly.

5. Secrecy : There is a complete secrecy in the business.

6. Risk : The whole risk is beared by the proprietor.

7. Management : This business is controlled by one person only.

8. Desire for Work : The sole proprietor owns all and risks all. So, he works with interest and dedications.


Partnership Firm

1. Membership : Two or more persons known as partners own partnership.


2. Agreement : An agreement is necessarily required to form partnership.

3. Capital : All the partners contribute towards capital of the firm. So, more capital than sole trading can be collected.

4. Decision : All important decisions are taken by consent of all partners. So, it is time consuming process.

5. Secrecy : The secrets of the business are in the knowledge of all the partners.

6. Risk : All the partners share risk.

7. Management : All partners have equal rights and all of them can participate in the management.

8. Desire for Work : There is less desire for work because a partner may think that other partners will share the benefit of his work too.