can the notion of separate legal personality be applied to sole proprietorship and partnership? give reasons for your answer (5marks)

The notion of separate legal personality cannot be applied to sole proprietorship and partnership.

In a sole proprietorship, the owner is entitled to all profits and is responsible for all business debts, losses as well as liabilities. Furthermore, a business owner's individual tax bracket determines the amount of tax paid on the earnings of the sole proprietorship, and therefore there is no application of a separate tax rate. A partnership is an unincorporated business and is consequently not a separate legal entity. Generally partners will have unlimited liability, where each partner pays an equal share of taxes, and shares in all the liabilities of the partnership. This is in contrast with other forms of businesses, which are deemed to be a separate legal entity, where incorporation prevents people from incurring further liability if the business is not successful, as well as protect their personal assets from those of the company, where they might own shares. The debts of the company remain the debts of the company.