Sole traders

Question 1

what is sole trader

Answer 1

an indivual who runs their own business
- unincorporated

Question 2

3 advantages of sole trader?

Answer 2

1. owner takes all the profit and hence their is good motivation
2. cheap and easy to set up does not require much legal work.
3. sole responsibility for decision making.

Question 3

3 disadvantage of sole trader

Answer 3

1. unlimited liability
2. difficult to find cover when ill - although sole traders often do employ people
3. limited capital for investment = harder for people to invest in sole trader so they can only rely on loans from banks.

Question 4

what is legal structure?

Answer 4

refers to ownership of business