Definition Of A Sole Trade Plus Giving The Advantages (Essay Sample)

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A Sole Trader
A sole trader is an enterprise that is operated by a single person and no legal distinctions that come between the owner and the entire business entity. The owner is usually in control of the whole business element and is legally accountable for any finances that are affiliated with the firm. These finances include; loans, losses and even debts. The owner is entitled to all the profits and also has unlimited responsibilities to every incurred loss and debt. Every asset in the business is entitled to the proprietor. Some of the sole proprietors include the franchise. He is a sole proprietor in that he pays a little a fee to the franchisor in exchange for the right as to use a company brand. The independent contractors are also sole traders as they have the right to reject or accept any assignments given. The self-employed business owners who conduct trade with the intent of making profits are also sole proprietors (Courtland &John, 2015)
The advantages of this kind of business are that; there is just little business capital required to start the business off the ground, this is usually not a big challenge for most of them. The sole trader is usually in full control of their businesses, meaning that they can run it how they feel like without any interference from anyone. All the business data is kept privately by the owner. It is not like that of the unlimited companies where most data is made public after the registration with the company house. There is quick decision-making process as the sole proprietor does not have to consult with others and this result in fast delivery goods and services.
Disadvantages are still there and they include; liability, where the sole trader is never viewed as a different entity, and they are subjected to the unlim...