Exercises · Q6
Q.Distinguish between sole proprietorship and partnership firm.
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Start your 14-day free trial to unlock the full solution →| Basis | Sole Proprietorship | Partnership Firm |
|---|---|---|
| Number of owners | Only one | Minimum 2, maximum 50 |
| Governing law | No special Act | Indian Partnership Act, 1932 |
| Formation | By a single person's decision | By an agreement (partnership deed) |
| Capital | Limited to one person's means | Larger, pooled by all partners |
| Management | Owner alone | All partners / as agreed (mutual agency) |
| Sharing of profit & loss | Whole to the owner | Shared in agreed ratio |
| Liability | Unlimited, on one person | Unlimited and joint, on all partners |
| Continuity | Ends with the owner | Death/exit of a partner may dissolve it |
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