Question

Sole Trading Concern and Partnership Firm

Answer 1

Sr. No.	Basis of Difference	Sole Trading Concern	Partnership firm
1.	Meaning	Owned and controlled by only one person.	In this form of business organization two or more persons come together to undertake a business activity and share profits.
2.	Formation	It can be formed at any time when proprietor decides.	It can be formed by an agreement between two more competent persons.
3.	Ownership	Sole trading concern has only one owner.	Minimum number of members is 2 and maximum 10 in banking and 20 in other firm.
4.	Registration	Registration is not necessary.	Registration is not necessary, but it is useful. (compulsory in Maharashtra)
5.	Secrecy	A sole trading concern ensures maximum secrecy.	Secrecy is shared by the partners.
6.	Managerial	The entire burden of management lies on owner.	All partners contribute these skills so there is division of work and expertise.
7.	Capital	Because of only one owner, amount of capital is very small.	Contribution of all partner’s capital increases.
8.	Profit& Loss	A proprietor is himself receiver of all the profit and loss.	Profit is shared by partners as per their agreements.