Tabulate the difference between a sole Trader and Parthership
Sole Trader Partnership
1. A sole trader is an individual who runs a business on their own. 1. A partnership is an association of two or more persons who come together to run a business.
2. In a sole proprietorship, the owner bears all the risk associated with the business. 2. In a partnership, the risks and profits are shared among the partners.
3. The owner has full control over the business and can make all the decisions. 3. In a partnership, the decisions are taken collectively by all the partners.
4. The sole trader is responsible for all the debts and liabilities of the business. 4. In a partnership, the debts and liabilities are shared among the partners.
5. A sole trader pays income tax on the profits of the business. 5. In a partnership, the partners pay income tax on their share of the profits.
6. A sole proprietorship is easier to set up and run. 6. Setting up a partnership involves more formalities like a partnership deed and agreement.
7. A sole trader is not a separate legal entity from the business. 7. A partnership is a separate legal entity from its partners.
Overall, sole proprietorship and partnership are two types of business organization that differs in terms of ownership, control, liability, taxation, and other legal aspects. The choice between a sole trader and partnership largely depends on the personal preferences, requirements, and goals of the business owners.