Here to help
make your
life easier

FAQs

Sole Trader

As a small business, the simplest and easiest entity to establish is the sole trader. After all, it's just you and there's no doubt that you already exist! In a nutshell, a sole trader is just you as an individual trading in your own personal name. Whilst its simplicity can be inviting, I would warn against going down this path for all but the smallest of home businesses.

Advantages

  • Simple to establish with little time required to get started.
  • Full control is retained by yourself, as you are the business.
  • All profits of the business are received by you, in your name.
  • You can stop, sell or change the business anytime with little notice required.

Disadvantages

  • As the sole trader you have unlimited liability for debts the business may incur.
  • As the sole trader you have unlimited exposure to liability for such matters as employee negligence.
  • Continuity of the business is dependent on you, your health and your ability to devote time to the business.
  • Adding additional partners, associates or investors can be difficult.
  • The ability to divest income to other taxpayers and possibly reduce income tax liabilities is not available.
Back to FAQs
 
Liability limited by a Scheme approved under Professional Standards Legislation