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Sole Trader

A sole proprietorship is an unincorporated business owned and operated by one individual who pays personal income taxes on business profits. Key advantages include being the sole decision maker, keeping all profits, and low start-up costs, while disadvantages are unlimited liability for debts, limited capital raising ability, and sole responsibility for business decisions and operations.

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Arim Arim
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53 views4 pages

Sole Trader

A sole proprietorship is an unincorporated business owned and operated by one individual who pays personal income taxes on business profits. Key advantages include being the sole decision maker, keeping all profits, and low start-up costs, while disadvantages are unlimited liability for debts, limited capital raising ability, and sole responsibility for business decisions and operations.

Uploaded by

Arim Arim
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Sole
Trader/Proprietorship
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Definition

 A sole proprietorship—also referred to as a sole trader or a


proprietorship—is an unincorporated business that has just one
owner who pays personal income tax on profits earned from the
business.
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Advantages

 you’re the boss

 you keep all the profits

 start-up costs are low

 you have maximum privacy

 establishing and operating your business is simple

 it’s easy to change your legal structure later if circumstances


change you can easily wind up your business.
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Disadvantages

 you have unlimited liability for debts as there’s no legal distinction


between private and business assets

 your capacity to raise capital is limited

 all the responsibility for making day-to-day business decisions is yours

 retaining high-caliber employees can be difficult

 it can be hard to take holidays

 you’re taxed as a single person (for Germany, tax laws are especially
heavy for sole traders, varying between 17% - 48%)

 the life of the business is limited

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