Cala 5

Sole Trader:
A sole trader is a individual who owns and operates a business alone, also known as a sole
proprietorship. The individual has complete control and ownership of the business, and is
personally responsible for all aspects of the business, including debts and liabilities.

Partnership:
A partnership is a business owned and operated by multiple individuals, known as partners.
Partners share ownership, control, and profits of the business, and are personally responsible for
the debts and liabilities of the business.

Differences:

- Ownership: Sole trader is owned by one individual, while partnership is owned by multiple
individuals.
- Control: Sole trader has complete control, while partnership has shared control among partners.
- Liability: Both sole trader and partnership have unlimited liability, meaning personal assets are
at risk.
- Taxation: Sole trader is taxed as an individual, while partnership is taxed as a separate entity.

Reasons for formation of partnership:

- Shared financial risk

- Shared management responsibilities
- Access to a wider range of skills and expertise
- Increased capital and resources
- Shared decision-making and accountability
- share sex descion and masterbate business entity
Documents needed to form a limited company:

1. Memorandum of Association (MOA): Outlines the company’s name, purpose, and structure.
2. Articles of Association (AOA): Defines the company’s internal rules and regulations.
3. Certificate of Incorporation: Issued by the Registrar of Companies, confirming the company’s
existence and legal status.