← Lessons 02-Business and Company Law
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Law of Contract Sole Traders Partnerships Limited Liability Partnerships — LLP Limited Companies Public Limited Company — PLC Private Limited Company Company Formation & Registration Certificate of Incorporation Private Company → Public Company Company Registers Company Accounts Share Capital Directors Company Secretary Auditors Annual General Meetings — AGM Proxies Company Reports People with Significant Control — PSC Winding Up / Liquidation Liquidator's Duties Bankruptcy ⭐ Key Exam Numbers to Remember

Sole Traders

Definition

  1. A sole trader is a person who runs a business on their own account.
  2. They:
    • Provide the capital.
    • Operate the business themselves, with or without employees.
    • Receive the proceeds from the business.

Advantages

  1. No formal procedures are required to start trading.
  2. Can begin trading immediately.
  3. Complete independence in decision-making.
  4. Quick implementation of business plans.
  5. Close supervision of customers and employees.
  6. Generally does not have to disclose business information publicly, apart from taxation requirements.
  7. No formal procedure is required to sell or close the business.

Disadvantages

  1. Long working hours.
  2. Few holidays.
  3. Illness can create serious business difficulties.
  4. Unlimited liability:
    • The owner is personally liable for business debts.
    • Personal wealth can be at risk.
  5. Limited capital for expansion.