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