Sole Trader Business Notes

Vocabulary flashcards covering the definition, characteristics, advantages, and disadvantages of a sole trader based on the study notes.

Sole Trader

An unregistered business where an individual sells goods or offers services (often from their own home).

Characteristics of a Sole Trader

Key features including having full control, keeping all profits, being easy to start, not having high startup costs, having no continuity, and paying personal tax on business profits.

Advantages of a Sole Trader

Benefits such as retaining all profits, having full control over business decisions, and not being expensive to set up.

Disadvantages of a Sole Trader

Drawbacks including being personally liable for all business debts, paying personal tax on profits, and requiring hard work with complete sole responsibility.

No Continuity

A characteristic of a sole trader indicating that the business does not have a separate legal existence and cannot continue without the owner.

Liability for Debts (Sole Trader)

A major disadvantage where the sole trader is personally responsible and legally liable for settling all debts incurred by the business.