Advantages and disadvantages of a sole trader

Advantages and disadvantages of a sole trader?

what are the advantages of a sole trader and advantages and what is the difference between limited and unlimited liability

Other Answers:

The advantage is that there's one person running it and making all the decisions - decisions are made quickly without argument

The disadvantage is that there's one person running it and making all the decisions - no alternative ideas are expressed and growth is limited

The liability of a trader is limited with regard to limited liability entities such as llps and limited liability companies. The limitation is normally subscribed share capital or a pre-set guaranteed amount. When liability is unlimited the trader is liable for the whole of the entities debts - to his last cufflink, as they used to say of Lloyds' names

Advantages of being Sole Trader:

Less legislation and compliance requirements
No "company car" benefit
Just taxed on Profits (so you can overdraw to live on without it becoming income)


Disadvantages

Wholly and personally liable for any trading debts (unlimited liability) as opposed to trading as a limited company when you are just liable (in the event of failure) for the value of your unpaid shares - plus of course any personal guarantees you may have given

hope this brief summary helps


to derke n - no-one's obliged to offer an answer, so if you disagree with the concept why make a posting at all ?

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