| Basis of Difference | Sole Trading Concern | Partnership Firm |
| Formation | Formed at the will of the owner. | Formed with a mutual agreement (oral or written) among the partners. |
| Management and control | Managed and controlled solely by the owner. | Management and control of ownership are shared by the partners. |
| Sharing of profits and losses | Profits and losses belong to the owner. | Profits and losses are shared among the partners in a predecided ratio. |
| Number of members | Only one member (owner) runs it. | Minimum-2, Maximum (in case of a banking business)- 10, Maximum (in case of ordinary business)- 20. |
| Governance | There is no regulating act to govern it. | It is governed by the Indian Partnership Act 1932. |
| Decision making | Decision making is rapid, as all the decisions are taken by the sole proprietor. | Decision making is relatively delayed, as it requires the consent of all partners. |
