Difference between Sole Trading Concern and Joint Stock Company
Basis of Difference
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Sole Trading Concern
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Joint Stock Company
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Governance
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Not governed by any law.
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Governed by the Companies Act 1956.
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Members
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It has only one member who is the owner of the business.
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In case of a private company:
Minimum: 2
Maximum: 50
In case of a public company:
Minimum: 7
Maximum: No limit
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Liability
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Liability of the sole owner is unlimited.
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Shareholders have limited liability to the extent of the unpaid amount on the shares held by them.
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Formation
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Easy to form, as there are no legal formalities.
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Difficult to form, as there are several legal formalities.
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Decision making
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All decisions are taken solely by the sole proprietor.
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All decisions are taken by the board after the approval of shareholders.
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Management and control
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Management and control lie in the hands of the owner.
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Management and control lie in the hands of the managing director.
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