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Sole trader
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What is a sole trader?
A sole trader is an individual running their business alone, assuming all financial risks and rewards.
What are the advantages of being a sole trader?
Advantages include full control, easy setup, and simplified tax processes.
What are the disadvantages of being a sole trader?
Disadvantages include unlimited liability and challenges in raising capital.
What is meant by unlimited liability?
Unlimited liability means that the sole trader is personally responsible for all debts of the business.
How are sole traders taxed?
Sole traders are taxed through income tax on their profits.
What is a business name registration?
A business name registration allows a sole trader to operate under a specific name legally.
Can a sole trader employ staff?
Yes, a sole trader can hire staff to assist with the business operations.
What type of records must sole traders keep?
Sole traders must keep accurate financial records, including income and expenses.
What is the impact of business partnerships on sole trading?
Forming a partnership transitions from sole trading to shared decision-making and liability.
What is the difference between a sole trader and a limited company?
A sole trader is personally liable for debts, while a limited company is a separate legal entity with limited liability.
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