Difference between Prop and Partnership

There are various forms of business organization in which the business entity can be organized, managed and operated. Sole Proprietorship is one of the oldest and easiest forms, which is still prevalent in the world. In this type of business, only one person owns, manages and controls the business activities. The individual who runs the business is known as a sole proprietor or sole trader. Here in this article let us understand what is the difference between Proprietorship and a Partnership firm.

Difference between Proprietorship and Partnership firm

Sole Proprietorship Partnership firm

A type of business organization, in which only one person is the owner as well as the operator of the business is known as a Sole Proprietorship.

A business form in which two or more persons agree to carry on business and share profits & losses mutually is known as Partnership.


The one who runs the business is known as a Sole proprietor or a Sole trader of the business.

When two or more people run a business, a partnership firm can be started. Individually known as partners and collectively known as a firm.

Number of Members

The minimum required member is only 1maximum amount of members are 2 in a Sole proprietorship firm.

In a Partnership firm, minimum members are 2 and the maximum amount of members is 100.


A Sole proprietorship firm has unlimited liability which is carried by the proprietor himself.

The liabilities are limited and they are shared by the partners.

Profit and Loss

The proprietor is solely responsible for the profits & losses.

The Profit and Loss ratio is shared within the partners equally.


In Sole proprietorship the scope for raising capital is limited.

As compared to Sole proprietorship the scope of raising capital is comparatively high.

Government regulations

In a sole proprietorship firm, there is no specific registration or statute.

A partnership firm is under the Indian Partnership Act, 1932.

Here in this article, we have understood the difference between Sole Proprietorship firm registration and Partnership firm in India, it will surely be useful for you to grow your business. If you’re wondering for Sole proprietorship company incorporation then you should visit the Online Sole proprietorship registration portal.

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