Question

Tabulate the difference between sole trader and Parthership

Answer 1

Sole Trader:

1. A sole trader is a single entity and the business is owned and operated by one individual.

2. This type of business is easy to set up without much legal or financial formalities.

3. The sole trader takes all the profits and bears all the losses.

4. The liability on any debt or legal issues falls on the owner personally.

5. The owner is completely responsible for the running of the business and making all the decisions.

Partnership:

1. A partnership is a business entity owned and managed by two or more individuals.

2. The partnership agreement outlines the terms and conditions of the business, including the rights and responsibilities of each partner.

3. Profits and losses are shared among all the partners based on the agreed-upon percentage.

4. The liability is shared between the partners. Each partner is responsible for the debt or legal issues of the partnership.

5. Each partner has a say in the running of the business and all major decisions are made collectively.