Sole Trader is a single entity business type. The only person who owns and operates the business. The owner receives all the profits of the business. The sole trader has unlimited liability for all the losses and debt of the business. A sole trader contributes to the new capital at any time and withdraws without any permissions. It might employe any number of peoples. Business debts cannot be paid by business assets that must be met from the sale of personal assets, such as a house or a car.

In law, a sole trader is not legally separate from the business they operate. The owner is legally responsible for the business.

A sole trader must maintain financial records and product financial accounts. There is no legal requirement to publicly available these accounts. Banks and other financiers may request you the financial accounts of your business. While applying the loans and overdraft facilities for your business.

Advantages

◼- Less Paperwork.
◼- Fast design making.
◼- Flexibility ( any time change in your business objectives ).
◼- No audit requirements.
◼- The owner has complete control own over the business.

Disadvantage

◼- The owner is personally liable for all business debts.
◼- May Lead to long working hours without any normal employees

 

sole businessperson