Sole Proprietor, Partnership and the Joint Stock Company

Sole trader or the sole proprietor is a person who runs its business solely, with the limited capital and easy formation he or she can establish a business with a limited rate of return.

Sole Proprietorship is a one man show, it is a business which is processed by a single person also know as One Man Business.

In the sole proprietorship there can be so many merits and demerit as sole trader do not have much capital to extend its business and it has also unlimited liability, the resource for the sole trader are limited.

It is very easy to form or establish a business for a single man with no legal formalities except registration with revenue board, if the business of a single person collapse all the liability of the business will be paid by the one single man only, it is also good sign for the person if he or she earns no matter in how much quantity he or she solely will get that profit.

Partnership on the other hand is the business which runs with the cooperation of more than one person, it is a process in which multiple people are engaged with the running of business they invest their capital in a single business with different or may be the equal ratio, it can be 50% 50% or this can be 60% 40%.

Partnership is easy for its formation more than two can form will a little legal formality they sign some bonds or agreement with each other in which the ratio or percentage of the capital is mentioned and the rate of return will be paid to them according to their investment.

Like sole proprietorship, partnership do not have unlimited liability, the liability in partnership is limited or you can say the risk for the liability is divided here among multiple persons, they share profit and they share liability as well.

Joint Stock Company is pretty different from other business as it is a legal entity and enjoys the perpetual life, the formation of the company follows the legal procedure it has its separate signature and it is formed by the shareholders.

Joint Stock Company is registered with the registrar office in which the register the name, address and the opening capital of their business. They can also extend their business by issuing new shares in the market but for that also they need to again register than capital with the registrar.

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