Differentiate between Sole Trader organisation and Partnership form of organisation.

Sole Trader:

1. Ownership:

   • Sole Trader: Owned and operated by a single individual. The business and the owner are considered the same legal entity.
   • Partnership: Involves two or more individuals who agree to share ownership, responsibilities, and profits.

2. Decision-Making:

   • Sole Trader: The owner makes all decisions independently, leading to quick decision-making.
   • Partnership: Decision-making involves input from multiple partners, requiring consensus or as per the terms of the partnership agreement.

3. Liability:

   • Sole Trader: The owner has unlimited liability, meaning personal assets are at risk for business debts or liabilities.
   • Partnership: Partners share the responsibility, but depending on the type (limited or general partnership), liability may be shared equally or be limited to each partner's investment.

4. Capital and Resources:

   • Sole Trader: Relies on personal funds or loans for capital. Limited access to resources compared to partnerships.
   • Partnership: Capital can be contributed by multiple partners, expanding the potential for investment and business growth.

5. Profit Sharing:

   • Sole Trader: The owner retains all profits after covering business expenses and taxes.
   • Partnership: Profits are shared among partners according to the terms of the partnership agreement, fostering a shared responsibility for business outcomes.

Management and Operations:

1. Management Control:

   • Sole Trader: Complete control over all aspects of business operations.
   • Partnership: Management responsibilities are distributed among partners based on their agreement, expertise, or specific roles.

2. Continuity:

   • Sole Trader: Business continuity is directly tied to the owner; the business may cease to exist upon the owner's death or decision to close.
   • Partnership: Depending on the type of partnership, continuity may be affected by changes in partner composition, but partnerships can have more stability compared to sole traders.

3. Flexibility:

   • Sole Trader: Greater flexibility in decision-making and adapting to market changes.
   • Partnership: Decision-making may involve negotiations and compromises, potentially leading to slower responses to market dynamics.

In summary, a sole trader is a business structure with a single owner, offering quick decision-making but limited resources and sharing of responsibilities. A partnership involves collaboration between two or more individuals, allowing for shared decision-making, capital, and risks. Each form has its own advantages and considerations, and the choice depends on factors such as the nature of the business, the level of collaboration desired, and the risk tolerance of the owners.