Question

Distinguish between the following:
Joint Stock Company and Sole trading Concern.

Answer 1

The difference between sole trading and Joint-stock company are as follows:-

1. In sole trading concern one individual is responsible for the management and ownership of business while in a Joint-stock company, there is a separation of ownership and management.
2. In sole trading, profit remains in the hands of the single individual while in a Joint-stock company, Profit is distributed among the shareholders in the form of dividends.
3. In sole trading concern, there is the only owner, while in a Joint-stock company there is a minimum 2, and maximum no limit.
4. In sole trading concern liability of the owner is unlimited, while in a Joint-stock company there is limited liability.
5. In sole trading concern existence of business depends on the existence of the owner while in a joint-stock company is stable due to separate legal existence.
6. In sole trading, there is no separate legal existence while in Joint-stock company there is separate legal existence.
7. In sole trading, only owner gets all the profits while in Joint-stock sharing of profit depends on a number of shares.