Comparing Sole trader and private limited company

Question 1

Sole trader characteristics

Answer 1

Owned and operated by one person
Unlimited Liability
All profits go to the owner
The owner has complete control over the business

Question 2

Private limited company

Answer 2

A private limited company is an incorporated legal entity
that has between 2 and 50 shareholders. It can be recognised
by its name as it includes ‘Pty. Ltd’ (Proprietary Limited).

It is essentially a private company that hs private shareholders and investors.

Examples include: Plumbers, Hairdressers, dentist,

Question 3

Private limited company characteristics

Answer 3

Owned by shareholders

Have limited liabilities

Complex to set up due to legal requirements

Shares are not publicly traded