Give the difference between sole-proprietorship and partnership.

QuestionsCategory: EducationGive the difference between sole-proprietorship and partnership.
1 Answers
Zaheer answered 4 months ago
Once you start your own business, start making money to mow your neighbour’s garden or sell your home jewellery online, you will have a sole proprietorship. In some states, if you run a business with your spouse, your business is still a sole proprietorship. Some business units, such as corporations and LLCs, require you to file documents of incorporation (such as articles of association) with the state to incorporate the business. Rather, as soon as you start accepting money for your goods or services, you start a sole proprietorship and don’t file the incorporation papers. If you are starting a sole proprietorship, even if you are the sole owner, you don’t have to work alone. You can hire employees, freelancers, and consultants to help you run your business. However, you are responsible for making the decisions for the business and all profits and losses are yours.
If you and someone else are doing business with the intention of making a profit, you have a partnership, sometimes called a general partnership. The partnership can start with the signing of a collaboration agreement or it can have an informal relationship based on a conversation and a handshake. Your partner can be an individual or a company, and you can have an unlimited number of partners. As with sole proprietorships, you don’t send anything to the state to establish a partnership. The advantage of a partnership over a sole proprietorship is that it shares responsibilities, resources, and losses. On the other hand, you are also splitting your profits and you may have a disagreement on how to run the business. One way to mitigate conflict is to enter into a partnership agreement.

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