1.5 - Sole Trader Flashcards
Who can trade as a sole trader?
Any individual
What good thing does a sole trader have?
Independent control and can retain all profits
What bad thing does a sole trader face?
Unlimited personal liability for all debts
What is the separation like between a sole trader and their company?
There is no separation
What do sole traders not need to do?
File accounts at Companies House
What is there not for a sole trader?
- No limit to size of their company
- No regulations, disclosure, or public accountability requirements, nor are there rules governing the conduct of the business
How do sole traders get money into their business?
Usually by investing their own money or getting a loan - at a disadvantage compared to other companies when it comes to raising finance
What are sole traders required to do?
Complete their own tax returns
What needs to happen for a sole trader to form or dissolve their business?
No special formalities, other than informing relevant government departments
