Company/firm

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Ajay Mishra

Ajay Mishra (Querist)
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12 May 2012 what is the difference between sole proprietor firm and company?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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12 May 2012 In a proprietorship the owner is an individual. He is the sole owner of the business.

In a company the owners are shareholders. A company is registered and governed by the Companies Act, 1956. A company has to comply with a lot of formalities.

Ajay Mishra

Ajay Mishra (Expert)
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12 May 2012 Hi

Sole Proprietor Firm:

A sole proprietorship is a business operated by one individual; the business is considered part of the individual, not a separate entity. The business profits and losses are included on the individual's personal tax return, and the individual retains personal liability for the business debts and lawsuits.

Company:

A company can be defined as an "artificial person", invisible, intangible, created by or under Law, with a discrete legal entity, perpetual succession and a common seal. It is not affected by the death, insanity or insolvency of an individual member. The Companies Act, 1956 deal with registration and operation of company in India.

Regards

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