sole traders

Question 1

sole trader

Answer 1

unincorporated

• business that is owned by 1 person , who retains all profits generated by business

Question 2

pro

Answer 2

1- simple set up set
cheap and qyick
tax is easy as its just in line with income tax

2. retain all prfoits
   no shareholders, no partners
3. decision making
   control over business

Question 3

cons

Answer 3

unlimited liabilty
- personal assets at risks if fails

• less sources of finance available , can’t issue shares, expansion is harder

Question 4

PLUMS sole trader to plm

Answer 4

P - slower expansion , but 100% profit

LU - does sole trader have car/house, if not then not much at risk

M= desire for full control?

S = need for finance ?