Unit 1 - SOLE TRADERS

Sole traders are where one person owns and controls the business. They are the most common form of business ownership in the United Kingdom. Many small shops, plumbers, electricians, painters and decorators are sole traders. There are lots of other examples. Although only one person owns and controls the business they may have other people working for them. There are a number of advantages of setting up as a Sole Trader:

You are independent, can make your own decisions and are accountable only to yourself
You keep all the profits for yourself
Sole traders are easy to set up
There are tax advantages of being a sole trader

There are also disadvantages however:

There is nobody to consult and discuss problems with – it can be very lonely
You are personally responsible if there is an accident in the business
There is no continuity; if the owner dies the business has to be reformed
There is Unlimited Liability – if the business goes bankrupt you may have to sell all your possessions, including your house, to pay the debts.
You may be short of capital and expertise

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