• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Sole TraderA sole trader is a business that is owned and controlled by one person. The business is more commonly known as, a 'one man business'.

Extracts from this document...


Sole Trader A sole trader is a business that is owned and controlled by one person. The business is more commonly known as, a 'one man business'. The business is either owned by private individuals for example friends and family, this is called the private sector, or by the public for example the government, this is called the public sector. A sole trader is: * The single owner of the business. * The person who makes all the decision. * The person who is responsible if anything should go wrong. Many people are opting to set up businesses in the private sector such as sole traders, partnerships, franchises (the right to trade under an established name) and limited companies. It is also quite straightforward is set up. Four out of ten businesses that registered for Value Added Tax (VAT) are sole traders; this shows the vast amount of businesses setting up as sole traders. Unfortunately many sole traders will not reach Vat threshold, which is the reason why even more businesses are sole traders. ...read more.


* Can keep business affairs private. Partnerships A partnership is a agreement between two or more people to take joint responsibility for the running of a business, to share in the profits and the risks. This means workload can be spread out and the risks of the business are shared. In many cases, it is friend or family of the owner or an employee that will be taken on board as a partner. In other words, a partnership means:banned. * Shared ownership. * Shared decision making. * Shared workload. * Shared profit. * Shared liability for debts. A partnership is almost as easy to set up as a sole trader. If no formal agreement is drawn up, then the rules of the partnership are as laid down in the 1980 Partnership Act. It is however, wise for the partners to draw up a special document, the deed of partnership Agreement, which outlines in detail: * How profits and losses are to be shared, if not equally. * How much money each partner is expected to put into the business. ...read more.


The disadvantages of a partnership are: * The partnership has unlimited liablility. * The partnership has a lack of continuity, e.g. if a partner dies than the partnership is automatically dissolved. * Partners can take decisions without consulting the other partners. * Even with the extra source of finance, there is still a lack of capital. * Disagreements between the partners. Code breakers! Sole proprietor: a one person business, the same as a sole trader or sole owner Unlimited liability: responsibility for the debts of the business extends to a person's personal wealth. Specialisation: concentrating on a particular task or job, being expert at it. Division of labour: splitting up the labour force into different specialisms so that each carries out his or her own specialism with greater efficiency. VAT threshold: the level of turnover at which the firm has to start paying value added tax. Delegation: giving jobs to other people, in a partnership this means that people use their skills where they will have the most effect. Deed of Partnership: a legal document that outlines how responsibilities, profits and workload are to be shared. Lack of continuity: because the partners make up the partnership, if one of them leaves, then the partnership is dissolved. The Partnership cannot be passed on or sold. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Business, Companies and Organisation, Activity section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Business, Companies and Organisation, Activity essays

  1. What is the sole trader? What are the advantages and disadvantages of being a ...

    permission if they wish to make food on the premises and a few other things depending on the type of business.

  2. Can sole traders survive?

    The only difference is the fact that the partners have to agree on the running of the business, so if they disagree then no action can be taken. Prediction: I expect the most popular type will be the PLC, this is because most big businesses do not want to be liable for any debt or money loss.

  1. Business Studies

    increase - Different financial and legal systems > Differences in company law & financial system between countries may create problems > Financial risk to the business from the influence of overseas economies on the level of economic activity in Aust * Marketing - Research of market > Strategies of global

  2. Assignment to investigate two types of business organisations - Sole traders and partnerships.

    The main aim of a sole trader is not the same as many other businesses. Where many businesses try to make profit, a sole trader tries to survive in the business world, they must also keep there trade alive to keep there inflow of income.

  1. Importance of Human Resources Management

    When the economies are in a rumble period, people have generally more to spend and there is high demand for goods or services, which pushes the demand for labour. The demand for labour falls when there is decline, if this occurs then it will force the Ford Motor Company to boost their production and therefore this would increase demand.

  2. Business Plan. After putting a lot of thought into what kind of business we ...

    Unrelated diversification is when a business starts selling products in a different area this expands their sales and profit. For example a business might only sell electrical such as iPods, televisions and laptops, but then they might start selling electrical watches to make the business bigger.

  1. Is it a sound business decision to locate a Coffee Republic franchise in Finchley ...

    used a key to show what the land use was mainly prioritised for. This was all noted down by using a tally chart. This method was chosen I can see what most of the land in the area is used for. Whether it is used for shops, recreational facilities etc.

  2. Describe the Business Purposes of Four Different Businesses.

    Coca Cola Company owns by thousands of shareholders and investor around the world, Coca Cola is a public limited company that means their shares are trades. The main advantages of being Public Limited Company are that shareholders have limited liability; this means that they will not lose the money that

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work