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DIFFERENCES BETWEEN BUSINESS ORGANISATIONS - Coggle Diagram
DIFFERENCES BETWEEN BUSINESS ORGANISATIONS
SOLE PROPRIETORSHIP
1 person
no separate legal entity
management: managed by owner
inspection of account:
not necessary
borrowing power: unrestricted
perpetual succession: automatically dissolve if
owner dies
registration procedure: 1-2 layers
subject to personal laws
own all asset / capital
all responsibility on owner
PARTNERSHIP
general: 2-20 members
professional: 2-200 members
no personal legal entity
management: all members may
take part in management
inspection of account:
not necessary
borrowing power:
not allowed to do floating charge
perpetual succession: dissolve with court
or without court
registration procedure: 3 layers
subject to Partnership Act 1961
all asset / capital is based on percentage
for each member
responsibility divided among members
COMPANY
no limit
separate legal entity
management: shareholders not
necessarily manage the company
inspection of account:
compulsory to disclose
borrowing power: bigger borrowing power
perpetual succession: forever
registration procedure: 7-8 layers
subject to Companies Act 2016
responsibilty on management
all asset / capital belongs to the company