Sole Trader Flashcards
What is a sole trader?
A sole trader is an individual who makes all business decisions themselves.
What is the liability status of a sole trader? And how does it affect them?
A sole trader has unlimited liability. If they go into debt, they are forced to sell off their personal assets to pay it back.
What is one challenge a sole trader may face in terms of financing?
It may be difficult to raise enough money to establish or grow the business.
What are the advantages of setting up a sole trader business?
Quick and easy to set up.
What is a potential downside of being a sole trader regarding workload?
Puts a lot of pressure on just one person.
What happens to the profits in a sole trader business?
The sole trader keeps all of the profits.
How is financial information handled in a sole trader business?
Financial information is kept private.
Fill in the blank: A sole trader can find it difficult to run the business if the owner is _______.
ill or takes time off.
