In this article we will discuss about meaning of Sole Proprietorship and Partnership and also discuss Difference between Sole Proprietorship and Partnership with its comparison.
Meaning of Sole Proprietorship
Sole proprietorship refers to a business organization in which enterprises are controlled or owned by a single person. Sole proprietorship is the oldest form of business enterprise in India. It is the simplest form of business and all the risk or losses are bearer by single person. In case, if he wants any help they can get it from their friends, family or relatives. It doesn’t require any legal recognition or formalities and simplest way to open business.
It is also known in simple words one man business which is organized and controlled by single person.
According to William R. Basset “The one-man control is the best in the world if that man is big enough to manage everything”.
The word partnership means an association in which two or more persons are agreed to form business by sharing their profits and sharing of losses.
According to Partnership Act, 1932 section 4 defines partnership, “Is the relationship between two or more person who are agreed to share profit of the business and carried all activities by them”.
Also Read :Concept of Partnership its meaning features advantages and disadvantages
According to Uniform Partnership Act of the USA partnership is “an association of two or more persons to carry on as co-owners a business for profit”.
In Partnership all the persons who are agreed to manage business with responsibilities have right to participants in business decisions and manages all activities of business organization.
Difference between Sole Proprietorship and Partnership
SOLE PROPRIETORSHIP V/S PARTNERSHIP
|Basic for comparison||Sole Proprietorship||Partnership|
|Meaning||Sole proprietorship refers to a business organization in which enterprises are controlled or owned by a single person.||The word partnership means an association in which two or more persons are agreed to form business by sharing their profits and sharing of losses.|
|Liability of members||Unlimited liability||Unlimited liability of all partners.|
|Governed under||Not specified Act.||Indian Partnership Act,1932|
|Minimum number of members||One member||Two members|
|Maximum members||One member||Unlimited|
|Maintenance of Secrecy||Secrecy maintained because only single person is there.||Risk maintaining secrecy because it is open to every partner.|
|Decision making||Quick decision making||It takes time in decision making.|
So we will discussed meaning of Sole Proprietorship and Partnership and also discuss Difference between Sole Proprietorship and Partnership with its comparison. For any query comment below.