Sole Trader Disadvantages

| The partners are jointly and severally liable for business debts and obligations. The partners are held personally responsible for the business and may be sued personally for liability. Partners’ personal assets are subject to lawsuit(s) made against the business. Lack of continuity; death of a partner may end the partnership/business if a buy/sell agreement is not in place. Disagreements may be difficult to resolve.

Sole trader is where a business is run as an individual; so that all profits are their own after tax has been paid on them. Within a sole trader organisation it is possible to employ staff, as the sole trader only means that you own the business personally and do not actually have to work by yourself.

"The association of two or more persons to carry on as co-owners of a business for profit forms a partnership,

Being a sole trader has many advantages. Most importantly, it is cost effective, simple and easy to setup and maintain. A sole trader completely controls the direction and

responsible for business debt, and has one or more limited partnership who are only liable to

Limited Partnership: This partnership consists of a blend of both general and limited partners. This kind of agreement/partnership lets the general partner manage the entire operation, but they are still fully liable for debts. The limited partner only invests his/her money, and can only lose what they invested.

• Control: A sole proprietor has total control of the company and they make all the good decisions and they must deal with decisions that did not turn out the way they intend. The other notable factor in being a sole proprietor of a business is what would happen to the business if the owner became ill or died; typically the business would stop operations based on the structure and debts would need to be resolved as well as customer commitments would need resolving based on the type of business.

Sole traders portray any business that is owned and managed by a single person, although sole traders employ employees. The owner is normally the person that is liable for the businesses decisions

Personal debts and any other unforeseen events is the owner’s responsibility (Kelly & Williams 2017). For instance if the sole proprietorship company gets sued and the person suing wins, the court can

I own and operate Pretty Baked on my own. I chose to be a sole trader because it is the simplest and cheapest structure to establish especially when opening a small business like I am. I receive all the profits but I also suffer all the losses. This structure is suitable for my business because it is easier for a small business and there is no one else to blame but my self. If I put my self in a bad situation, I would have to get out of it my self, which will make me a stronger business woman for further problems to come. Being a sole trader means that I have unlimited liability. This is not necessarily a good thing but it is what I chose, as I have to take responsibility for my business. Due to the unlimited liability, I may be forced to sell

A partnership is a business organization where the partners own the business together and are

Partnerships are also considered a discrete asset and as such (as opposed to a sole proprietorship) can be transferred to other people, heirs, or estates. Transference is usually limited by the terms of the partnership agreement (washingtonpost.com, nd). But partnerships can also be risky. The business-related acts of one partner can legally bind all other partners. So it 's essential that you enter into partnerships only with people you trust

Being as a sole trader, you are able to retain complete control over your business. As there is no division between business assets or personal assets, which includes your share of any assets jointly owned with another person (such as your house or car). Your liability is unlimited which means that personal assets can be liable for any business debts.

Decision making is fast for the sole trader as it’s just the owner who decided where the business is heading and whether or not to undertake any work and where and when they will work. They are normally closer to their customers and offer a more personalised attitude and improved customers service.

Also, this form of business is the easiest form out of the three businesses to set up or shut down. Because it is so simple and easy to set up or shut down, sole proprietorships are extremely popular with contractors as well as business owner. Company liabilities (such as debts) fall on the owner 's shoulders. So all of the profits are the owner 's, but then all of the debts are the owner 's too. Most sole proprietorships are small businesses; though not all of them are. When sole proprietorship businesses enlarge, many become limited liability companies (LLC) or S corporations.