Sole Trader Flashcards
1
Q
What is a sole trader?
A
A sole trader is a business that is owned and controlled by one person.
2
Q
Name the advantages of being a sole trader
A
The owner keeps all of the profits
The owner has complete control
Quicker and easier to set up than a partnership or a limited company
Unlimited liability
3
Q
Name the disadvantages of being a Soletrader?
A
The only source of capital is the one owners plus what he/she can borrow
Long hours and the business probably loses money if the owner is ill or on holiday
Unlimited liability
4
Q
What is unlimited liability?
A
If the business fails, the owner is responsible for all of its debts;
Even if he/she has to sell personal possessions to pay the business debts.
