Partnership vs Sole Proprietorship

Partnership vs Sole Proprietorship

July 23, 2019

A sole proprietorship, as the name implies, is when one person forms and single handedly operates a business, while a partnership is formed and operated by at least 2 people.

DIFFERENCES BETWEEN SOLE PROPRIETORSHIP AND PARTNERSHIP

PROFIT SHARING: in a sole proprietorship, the proprietor takes all the profit while profit is shared between partners in a partnership.

FINANCING: The proprietor finances the business by himself while partners contribute to the finances of a partnership.

RULES AND REGULATIONS TO GOVERN THE BUSINESS: partnerships usually have a partnership deed that states duties, liabilities etc of partners, while a sole proprietorship has no such document as it is run by one person, there are no set rules for its operation.

DISSOLUTION; a sole proprietorship ends when the proprietor dies, retires or becomes incapacitated. For a partnership, this can only happen where there is no set provision for dissolution in the partnership deed or there is no partnership deed at all. However, a partnership rarely dissolves because of death, incapacitation or bankruptcy of one partner because the other partners can continue the business when one dies, as long as it is stated in the partnership deed.

SIMILARITIES BETWEEN SOLE PROPRIETORSHIP AND PARTNERSHIP

  1. Both do not exist as separate legal entities from the owners, therefore the owners of either a sole proprietorship or partners in a partnership are personally liable for debts and obligations of the businesses.
  2. Both are required to be registered with the Corporate Affairs Commission

Best Regards,

Team 618 Bees

Do you have any question or clarification regarding the topic in this post that was not provided by this post? Or you have questions regarding what the law states about a particular legal issue? Log on to our website – www.618bees.com or call us on 23412803791 to speak to any of our consultants that are always on hand to provide answers to such questions.

 

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer.This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached.

A sole proprietorship, as the name implies, is when one person forms and single handedly operates a business, while a partnership is formed and operated by at least 2 people.

DIFFERENCES BETWEEN SOLE PROPRIETORSHIP AND PARTNERSHIP

PROFIT SHARING: in a sole proprietorship, the proprietor takes all the profit while profit is shared between partners in a partnership.

FINANCING: The proprietor finances the business by himself while partners contribute to the finances of a partnership.

RULES AND REGULATIONS TO GOVERN THE BUSINESS: partnerships usually have a partnership deed that states duties, liabilities etc of partners, while a sole proprietorship has no such document as it is run by one person, there are no set rules for its operation.

DISSOLUTION; a sole proprietorship ends when the proprietor dies, retires or becomes incapacitated. For a partnership, this can only happen where there is no set provision for dissolution in the partnership deed or there is no partnership deed at all. However, a partnership rarely dissolves because of death, incapacitation or bankruptcy of one partner because the other partners can continue the business when one dies, as long as it is stated in the partnership deed.

 

SIMILARITIES BETWEEN SOLE PROPRIETORSHIP AND PARTNERSHIP

  1. Both do not exist as separate legal entities from the owners, therefore the owners of either a sole proprietorship or partners in a partnership are personally liable for debts and obligations of the businesses.
  2. Both are required to be registered with the Corporate Affairs Commission

 

 

Do you have any question or clarification regarding the topic in this post that was not provided by this post? Or you have questions regarding what the law states about a particular legal issue? Log on to our website – www.618bees.com or call us on 23412803791 to speak to any of our consultants that are always on hand to provide answers to such questions.

 

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer.This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached.

More Articles

Search

Connect With Us

Got any questions?

If you are having any questions, please feel free to ask.

Send us an email

Frequently Asked

  • What additional documents do I require to file my Annual Returns?
  • What’s the difference between a business name and an LLC?

    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 
  • What is a testimonium clause in an agreement?

    This is the part of the agreement where the witness attests to have witnessed the execution of the agreement.
  • What are the product categories available when registering with NAFDAC?

    The product categories include: Food, Cosmetics, Drug, Medical Device, Agro-Chemicals & Pesticide, Veterinary Products, Vaccines & Biologicals, Herbal and Nutraceuticals and Water
  • What is classified as personal data?

    Name, photograph, personal health/bio information, account/financial information, phone number, Address, date of birth, place of birth, Email address, etc.
  • Do I need permission to copy or use any copyright material in Nigeria?

    You do not require permission under the Nigeria Law to use or copy a copyright material when it is for research purpose, educational, non-commercial purpose, reviews and criticism etc

    However, when the copies are large, you must seek permission from the copyright owner.
  • Is there a penalty for late renewal of registration of products with NAFDAC?

    Yes, there is a late renewal fee, which is dependent on the category of the product.
  • Why do i need a Shareholders Agreement?

    You need a Shareholders Agreement to protect your investment in a company.  The shareholders Agreement establishes a fair relationship between all shareholders and sets out how the company is run.
  • Will my trademark registration in Nigeria protect me worldwide?

    No, all intellectual property (IP) rights which includes trademarks are territorial, which means you are protected in the countries in which you register them.
All FAQs
Call Us Now on +234 901 719 0079 Chat on WhatsApp