They both operate in a private sector of business
Sole Trader/Partnership is the most simple way to conduct a business. It is also the most common of all ways. It does not involve any registration, keeping records or accounts. The method is simple, just record everything that goes out or in and keep the profits at the end.
The similarities between Sole Trader Partnership and Limited Liability are not many. However there are plenty of differences between them. Let us discuss both similarities and differences:
- The Sole Trader/Partnership is Unincorporated whereas the Limited Liability companies are Incorporated form of business.
- The Sole Trader/Partnership can be started by one person whereas the limited liability company is started by at least two people.
- The Sole Trader has personal and unlimited liability whereas the limited liability company has a limited and impersonal liability towards all the lenders.
There is as such no similarity between these two forms of business as they are entirely apart. It is suited for two different forms of business. However they have one similarity that is profit generation.