Soletrader And Unlimited Liability Flashcards
1
Q
What’s a sole trader?
A
A sole trader is a business that is owned and controlled by one person.
2
Q
What are the advantages of being a sole trader?
A
The owner keeps all the profit
The owner has complete control
Quicker and easier to setup than a partnership or limited company
3
Q
What are the disadvantages of being a sole trader?
A
The only source of capital is what the owner can put in 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.
