How does a partnership differ from a sole proprietorship? Which disadvantages of sole proprietorship does the partnership tend to eliminate or reduce?

Question

Business

Bailey Woodward

31 December, 05:26

How does a partnership differ from a sole proprietorship? Which disadvantages of sole proprietorship does the partnership tend to eliminate or reduce?

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Answers (2)

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Audrina Wong · Answer 1

Only one owner owns the company i. e sole proprietorship, two or more individuals called partners own the partnership. The downside minimized is that the partnership removes or reduces its limited managerial skills, since partners may blend their experience and skills.

Libby Bass · Answer 2

Two or more people contribute the capital for partnership hence there is more capital to start up and run the business while only one person does so for a sole proprietorship.

Explanation:

The sole proprietorship is a form of business owned by one person while a partnership is a form of business owned by a minimum of 2 people and a maximum of 50 persons.

Both business have similarities in that the liability of the sole proprietor and those of the partners are not limited.

However, a key advantage of partnership over sole proprietorship is that more capital is available to start up and run the business in a partnership that in sole proprietorship. Two or more people contribute the capital while only one person does so for a sole proprietorship