Difference between Sole Trading Concern and Partnership Firm

Difference between Sole Trading Concern and Partnership Firm

Basis of Difference	Sole Trading Concern	Partnership Firm
1. Formation	Owned and operated by a single individual.	Formed by an agreement between two or more individuals.
2. Number of Owners	Single owner.	Multiple owners (partners).
3. Legal Status	No legal distinction between the owner and the business.	Legally distinct entity from its partners.
4. Liability	Unlimited liability for the owner.	Partners have unlimited liability, jointly and severally.
5. Decision-Making	Sole control and decision-making rests with the owner.	Decision-making is shared among the partners.
6. Capital Contribution	Owner contributes all the capital.	Capital is contributed by all partners based on agreement.
7. Continuity	Limited continuity; business continuity depends on the owner's lifespan and willingness to continue.	Continuity is relatively more stable, can continue beyond the lifespan of individual partners.
8. Management	Owner manages the business independently.	Management responsibilities can be shared among partners.
9. Profit Sharing	Owner takes all profits.	Profits are shared among partners as per the agreed terms.
10. Transfer of Ownership	Limited options for transferring ownership.	Transfer of ownership may require the consent of partners.
11. Accountability	Sole responsibility rests with the owner.	Partners share responsibilities and are mutually accountable.
12. Privacy	More privacy as there is no need to disclose financial information publicly.	Financial information is shared among partners and may be subject to public disclosure.
13. Registration	Less formalities in terms of registration and compliance.	Requires formal registration and adherence to legal requirements.