PARTNERSHIP VS. SOLE PROPRIETORSHIP

PARTNERSHIP VS. SOLE PROPRIETORSHIP

September 21, 2018

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.

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Frequently Asked

  • When are Annual Returns due for filing?

    A company’s first Annual Returns are due for filing after 18 months of its inception, subsequently it should be filed annually as the name implies. The filing dates could differ for each company depending on their financial year end but must be filed not later than 42 days after its Annual General Meeting.

    The Annual Returns for Business Names is due not later than the 30th of June each year except in the year the business was registered.

  • 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 are the benefits of Registering with SON?
    1. Product traceability in the Nigerian market
    2. Detection of counterfeit products
    3. Barriers to the circulation of substandard goods
    4. The official SON Product Registration Logo and number are displayed on registered products.
  • 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. 

  • Why do I need a trademark?

    You need to register your trademark because if you don’t register it, someone else can! It helps identify you as the source ad indicates a consistent level of quality of your products and services. Securing a registered trademark protects your brand, and provides you with tools to prevent someone else from using similar signs and riding off the back of your business.

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