Sole Proprietorship vs Limited Partnership in the PH

Liability:
Sole Prop:
Limited Partnership:
Limited partners are

Sole head is liable up to own property.

Only general partner is personally liable,
only liable up to the extent of their listed

investment.
Growth:
Sole Prop:
and actually shys away

No investors may be recognized by law

possible investors since sole props are

usually designed for

Limited Partnership:
the personal

small time businesses

Invites investors and partners alike since
properties of limited partners are

protected, since by law only

the general partner is held out.
Taxes:
Sole Prop:
since treated as
Limited Partnership:
afforded (actually put in

less deductions and exemptions applicable,

personal taxes
more tax deductions and exemptions
place by law to encourage investors)

Cost in putting up:

Sole prop:
Cheapest among the business entities
Limited Partnership: A bit more expensive than sole prop but
cheaper than setting up
a corporation
Protection by Law:
Sole Prop:
Protection is only afforded by the civil code
Limited Partnership: Protection is afforded by the civil code and
corporation code
Flexibility
Sole Prop:
since permits and

no room to mandate own rules in business

business licenses is strict as to the

template and specific
requirements set forth by the designated
government agency.
growth by investors/partners will require
a transition to a
partnership or corporation as well.
Limited Partnership: a partnership is ruled by the terms and
agreements of the
partners submitted to the SEC in setting
up the partnership and
may be revised in the future following
internal protocols. As well
the accommodation of new partners and
investment would only
warrant an update in the partnership
books