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Factors

Sole Trader

Partnership

Limited Liability Company

Management Sole trader involves management by single individual Partnership involves management by more than one individual. Partnership can also have management by single individual and other individual acting as sleeping partner. Limited liability company involves management by board of directors comprising of one or more directors.
Liability Sole trader is responsible for his/her debts until his/her last penny. Partners are individually and collectively responsible for their debts until their last penny. Shareholders are responsible to the extent of capital invested in the form of shares.
Separation Management and Ownership is considered as one Management and Ownership is considered as one Management is separate from Ownership.
Succession Economic life of business is limited to the ability to manage by the owner. Economic life of business is limited to the ability to manage by the partners. Economic life of business is independent of shareholders and board of directors. It is due to separate legal status of the company.
Taxation Taxation rules for individuals apply Taxation rules for individuals apply to each partner separately. One partner is not responsible for tax liability of other partner. Taxation rules for corporation apply. Tax on dividend payments to shareholders is separately payable.
Financial Reporting Voluntary as a part of best practice. Voluntary as a part of best practice. However, limited liability partnership (LLP) have compulsory requirement. Compulsory under companies act 2006 UK. It also applies to most other jurisdictions.

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