Many are the times we get into that situation where we are forced to highlight the difference between limited company, sole proprietorship and partnership to clients. Businesses may be categorized differently depending on a number of factors. Basing your argument on ownership, a business might be thought of as a limited company, sole proprietorship or a partnership.
LIMITED COMPANY IN KENYA
A Limited Liability Company is legally a separate Business entity. It is frequently referred to as a legal being where the directors and the shareholders have limited liability in the business. When such a company is formed, it has an Authorized share holding or capital that defines the limit of the shareholder liability. This is the most viable options if the capital is being invested into the business by anyone who does not wish to be involved in running the business.
SOLE PROPRIETORSHIP / BUSINESS NAME IN KENYA
A sole proprietorship is generally a Business Name (BN) Registered, owned and headed by one individual only. The person and his business are “one” legally. One has to maintain a careful records if he or she is self-employed. Such a person is legally liable for all the losses and profits in the business. If the business fails, he or she is personally liable as he or she and the business are one and the same thing. The advantage is that, he or sh has complete control over the business and does not have to share his profits with anyone.
PARTNERSHIP / BUSINESS NAME IN KENYA
A partnership is a Business Name Registered and run by two or more people together. A written partnership agreement is at times necessary stating the terms and conditions of conducting the partnership business without harming the interest of either party. Profits are shared either equally or as per the terms laid down the written agreement. The partners in a partnership just like in a sole proprietorship are personally liable for acts of the partnership
