Being a Sole Trader

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What would be the advantages and disadvantages and disadvantages or

remaining as a privately owned familly business with me as a sole trader?

Working in organisations

A sole trader business consists of one who opens up a business on

their own initiative. There are three types of sectors of businesses

these comprise of the mutual, public and private sector. Private

family businesses are include within the private sector. The following

information is an describes the private sector:

The private sector is made up of businesses and organisations that are

owned by individuals or groups of the individuals. The private

includes the following types of business/companies these are: Sole

traders, Partnership, Private limited companies, Public limited

companies and Franchises. A sole trader is a person who opens up a

business on his or her own account (as mentioned above). A partnership

is when two or more persons agree to carry on a business together. A

private limited company cannot offer their shares for sale to the

public at large, which makes their ability to raise money limited. A

public limited company is an incorporated business and is a large

organisation which shares are sold in vast numbers. Franchises are

company’s which are authorised to sell a goods or services in a

particular place.

As a small clothing and accessories business that has grown from a

small company to a moderate sized business Mr cannon will benefit from

a sole trading business analysing the characteristics. The

characteristics of a sole trader include:-

Setting up:

Mr Cannon must register as self-employed.

Liability:

If the business fails, then the owner is fully responsible for all the

business' debts.

Management:

The owner's word is final.

Finance:

More often than not, owner's personal money.

Profits:

All profits belong to the owner.

Taxes Etc.:

Self employed status. Even if the owner doesn't draw on his profits

they are still taxed. Losses can be offset against tax on other

income.

Continuity:

If owner dies or retires, the business may crumble

What would be the advantages and disadvantages and disadvantages or

remaining as a privately owned familly business with me as a sole

trader?

Operating as a sole trader is the most common structure used when

starting a business. the advantages of a sole trader and remaining as

a privately owned family business are as follows:-

Sole Trader

Generally, only a small amount of capital needs to be invested, which

should reduce the initial start-up cost.

Operating as a sole trader allows the owner to reduce tax payable on

the employment income if losses are made. This tax reduction is

subject to the business satisfying non-commercial business loss

provisions.

Compared with the other business structures, operating as a sole

trader is the cheapest option to set up and the easiest to administer.

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