An individual carrying out business activities is the sole proprietor and its business entity is said to be a Proprietorship Firm. A sole proprietor and its firm are not different from each other. The Firm has no legal existence and there is no specific Act to regulate this organization. However, a partnership should have at least two members to constitute a firm and carry out any business activity.
There are two types of Partnership firm, registered and unregistered – both regulated by Partnership Act, 1932. An unregistered partnership can be registered any time after it is formed.
In a partnership all the partners are liable for the acts of a partner whereas a sole proprietor is liable for his own actions.
Maximum number of Partners in partnership firm is 50 whereas; in proprietor ship is only 1 the proprietor himself.
Partnership firm is also not different from its partner however for tax purposes the Income tax return of firm is filed separately on PAN of the Firm.
The partnership firm is taxed at 30% flat rate whereas the income from proprietorship firm is taxed at slabs rates of individual assessee.
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