Compare and contrast the partnership vs sole trader in formation and business structure.

Sure, here is a comparison and contrast of a partnership and a sole trader in terms of formation and business structure:

Formation:

Sole Trader:

1. A sole trader business is the simplest form to set up because it is run by just one individual.
2. It requires minimal paperwork and legal formalities.
3. The sole trader just needs to register his or her business name with the appropriate government agency.

Partnership:

1. A partnership is slightly more complex to form than a sole trader.
2. It involves two or more people who agree to share the profits or losses of a business.
3. A partnership agreement needs to be drawn up to outline the responsibilities and profit-sharing ratios of each partner.
4. The partnership must also be registered with the relevant government agency.

Business Structure:

Sole Trader:

1. In a sole trader business, the owner has total control over the business decisions.
2. The business and the owner are legally considered the same entity, so the owner is personally liable for all the debts of the business.
3. The profits of the business are considered the personal income of the owner and are taxed as such.

Partnership:

1. In a partnership, control of the business is shared among the partners as per the partnership agreement.
2. The partners are jointly and severally liable for the debts of the business.
3. The profits of the business are divided among the partners according to their agreed profit-sharing ratios and are taxed as personal income to the partners.