DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH

Name : R.Dasharatham
Designation : Lecturer
Branch : D.C.C.P.
Institute : GPW, Warangal
Year : I year
Subject : Business Organization
Subject code : CCP-104
Topic : Forms of Business Organization-Sole
Trading and Partnership
Duration : 50 mts
Sub topic : Distinction between sole trading
and partnership
Teaching Aids: :P.P.T., Animation, Photos.
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Objectives
On the completion of this period you would
be able to :

 Distinguish between Sole Trading and

Partnership

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Recap

In the previous class, we have discussed

about the
 Dissolution of Partnership
 Dissolution of Partnership Firm

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Distinction Between Sole Trading
And Partnership

There are several differences between the Sole

trading and the Partnership.
They are as follows :

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1. Minimum Number Of Persons

sole trading partnership

 Only one person required  Minimum two members

to form  Maximum no is Ten in
 no minimum or case of Banking and
maximum limit for Twenty in case of general
number of members Business

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2. Act applies

Sole trading Partnership

 No special Act to regulate

 Regulated by the
Partnership Act,
1932

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3. Agreement

Sole trading Partnership

 No agreement, as there is
 There must be an
only one member
agreement among the
partners

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4. Trade Secrets

Sole trading Partnership

 Can be maintained easily  Cannot be maintained

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5.Business Decisions

Sole trading Partnership

Partnership

 Single man’s decision  Decision of more than

 Quick decisions one individual
 Delay in decisions

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6. Capital and Scope of Business

Sole trading Partnership

 cannot secure large capital
 can secure large capital
 scope of expansion is
limited  the firm can be
expanded

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7. Division of Labour

Sole trading Partnership

 cannot be introduced
 person looks after the
affairs of the business
 can be introduced
 two or more persons look
after the affairs of the
business

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8. Quick Decisions

Sole trading Partnership

 can be taken
 not possible to take quick
 need not consult decisions
anybody  partners have to consult
one another

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9. Liability and conflicts

Sole trading Partnership

 The Liability of sole  The liability of the partner is
trader is unlimited unlimited, joint and several

 Possibility of conflict
 no possibility for conflict between the partners
as there is only one
person

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10. Business losses & Dissolution

Sole trading Partnership

 All business losses  borne by all partners
borne by only one according to their profit
sharing ratio.
person.
 The business cannot end
 The business comes to after the death or retirement
an end with death, of a partner.
insolvency or lunacy of
the sole trader..

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Summary
We have discussed about:
 Distinction between Sole Trading and Partnership

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Quiz:
1. What are the maximum no. of members required
for the formation of partnership on banking:
a)20
b) 15
c) 10
d) 02
Ans:a

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 Contd…

Quiz:
2. Trade secrecy will be maintained in case of:

a) Partnership business
b) Sole trading
Ans:b

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Frequently asked questions
1. List out any four differences between the Sole
trading proprietorship and the partnership?

2. Explain the differences between the sole trading

and partnership?

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Assignment
1. Distinguish between the Sole Trading and the
Partnership businesses?

2. What are the features of Sole Trading?

3. What are the features of Partnership firm?

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