DIFFERENCE BETWEENSOLE PROPRIETORSHIP,

PARTNERSHIP &JOINT STOCK COMPANY

Compiled By:-Dharti Shah (46)Dhrumil Shah (47)Kavisha Shah (48)Param Shah (49)Shairavi Shah (50)

CONTENTS Sole Proprietorship Features of Sole Proprietorship Partnership Features of Partnership Joint Stock Company Features of Joint Stock Company Difference Examples for forms of organizations Bibliography

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SOLE PROPRIETORSHIP

The sole proprietor is an unincorporated business with one owner who has unlimited liability & is the sole recipient of the profit or loss incurred by the firm.It is the simplest form of business with least government intervention. This is because of the fact that it is not a legal entity.

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FEATURES OF SOLE PROPRIETORSHIP

• Unlimited liability• No government intervention• Quick decision making• Flexible• Single handed• Secrecy maintained• Sole receiver of profit/loss(if any)• Can be operated from home

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PARTNERSHIP

Section 4 of the Indian Partnership Act, 1932 defines Partnership as the relation between persons who have agreed to share the profits of the business carried on by all or anyone of them working for all. The minimum members in a partnership firm are 2 and maximum 10(Banking) & 20(General).

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FEATURES OF PARTNERSHIP

Sufficient Capital Divided liability Risk sharing Profit distributed Easy expansion Specialized skills present Profit motive

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JOINT STOCK COMPANY

A Joint Stock Company has to go through a series of steps before it commences, viz., Formation, Incorporation, Capital Subscription & Commencement of Business.In case of public company, it has to complete all the four stages whereas in case of private company, it can start with its operations after the incorporation stage.

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FEATURES OF JOINT STOCK COMPANY

Artificial person Separate legal entity Limited liability of members Perpetual existence Common seal Risk bearings

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DIFFERENCE

Basis Sole Proprietorship Partnership Joint Stock

Company

FormationMinimal Legal Formalities,

easiest formation

Registration is optional, easy

formation

Registration compulsory, lengthy and expensive formation process

Members Single ownerMinimum- 2Maximum :

(Banking- 10Others- 20)

Minimum Private- 2

Public Company- 7

Private Company-50

Public Company- unlimited

Capital Contribution Limited finance Limited but

moreLarge financial

Resources9

Basis Sole Proprietorship Partnership Joint Stock

Company

Liability Unlimited Unlimited and joint Limited

Control and Management

Owner takes all decisions, quick decision making

Partners takes decision,

consent of all partners is

needed

Separation between

ownership and management

ContinuityUnstable,

business and owner regarded

as one

More stable but affected by

status of partners

Stable because of separate legal

status

EXAMPLES FOR FORMS OF ORGANIZATIONS

Sole Proprietorship- Ashoka, Gandevikar Jewellers, C H Jewellers,

Partnership- Neptune Trading Company

Joint Stock Company- Reliance Industries Pvt. Ltd., TATA, BSNL

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BIBLIOGRAPHY

Wikipedia.org Entrepreneur.com Investopedia.com

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