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Difference between Sole Trading Concern and Joint Stock Company
| Aspect | Sole Trading Concern | Joint Stock Company (Company Business) |
|---|---|---|
| 1. Formation | Owned and operated by a single individual. | Created by law through a process of incorporation. |
| 2. Legal Status | No legal distinction between the owner and the business. | A distinct legal entity separate from its shareholders. |
| 3. Liability | Owner has unlimited personal liability. | Shareholders have limited liability, typically up to the amount invested. |
| 4. Ownership | Solely owned by an individual. | Owned by shareholders who hold shares in the company. |
| 5. Number of Owners | Single owner. | Can have a large number of shareholders. |
| 6. Transfer of Ownership | Limited options for transferring ownership. | Shares can be easily transferred without affecting the company's operations. |
| 7. Management | Owner manages the business independently. | Separation of ownership and management; managed by a board of directors. |
| 8. Decision-Making | Sole control and decision-making rest with the owner. | Decisions are made by the board of directors on behalf of shareholders. |
| 9. Capital Contribution | Owner contributes all the capital. | Capital is raised by issuing shares to the public or private investors. |
| 10. Continuity | Limited continuity; business continuity depends on the owner's lifespan and willingness to continue. | Generally, has perpetual existence, unaffected by changes in shareholders. |
| 11. Accountability | Sole responsibility rests with the owner. | Shareholders have limited accountability; they are not directly involved in day-to-day operations. |
| 12. Regulation | Less regulatory compliance compared to companies. | Subject to more extensive regulatory requirements and reporting. |
| 13. Public Offering | Typically not involved in public offerings of shares. | Can issue shares to the public through Initial Public Offering (IPO). |
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