Question

What is difference between parnership and sole proprietorship business?

Answer 1

Basis of Difference	Sole Proprietorship	Partnership
No. of Persons	It is carried by only a single person	It is carried by two or more persons
Agreement	No agreement is required for its formation	Agreement is required for its formation
Profits	The profits from business activities during an accounting period are enjoyed by the sole proprietor	The profits from business activities during an accounting period are distributed among the partners
Risk	Sole proprietor alone bears all the risks and losses of the business	The partners jointly bears the risks and losses of the business
Decision Making	It provides a quick decision making as the sole proprietor himself is the decision-taker.	The decision making process is slightly time-consuming, as it requires mutual-interaction among the partners.
Governing Law	There is specific law or act that governs the operations and activity of a sole proprietorship.	It is governed by the Partnership Act; for instance in India, partnership firms need to abide by the Indian Partnership Act of 1932.