What would be the advantages and disadvantages and disadvantages or remaining as a privately owned familly business with me as a sole trader?

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Ony Ani-Okoye

Working in organisations - Course one

Working in organisations

A sole trader business consists of one who opens up a business on their own initiative. There are three types of sectors of businesses these comprise of the mutual, public and private sector. Private family businesses are include within the private sector. The following information is an describes the private sector:

The private sector is made up of businesses and organisations that are owned by individuals or groups of the individuals. The private includes the following types of business/companies these are: Sole traders, Partnership, Private limited companies, Public limited companies and Franchises. A sole trader is a person who opens up a business on his or her own account (as mentioned above). A partnership is when two or more persons agree to carry on a business together. A private limited company cannot offer their shares for sale to the public at large, which makes their ability to raise money limited.  A public limited company is an incorporated business and is a large organisation which shares are sold in vast numbers. Franchises are company’s which are authorised to sell a goods or services in a particular place.

As a small clothing and accessories business that has grown from a small company to a moderate sized business Mr cannon will benefit from a sole trading business analysing the characteristics. The characteristics of a sole trader include:-

What would be the advantages and disadvantages and disadvantages or remaining as a privately owned familly business with me as a sole trader?

Operating as a sole trader is the most common structure used when starting a business. the  advantages of a sole trader and remaining as a privately owned family business are as follows:-

Sole Trader

Generally, only a small amount of capital needs to be invested, which should reduce the initial start-up cost.

Operating as a sole trader allows the owner to reduce tax payable on the employment income if losses are made. This tax reduction is subject to the business satisfying non-commercial business loss provisions.

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Compared with the other business structures, operating as a sole trader is the cheapest option to set up and the easiest to administer.

There can be no set-up costs unless a business name is required. In addition, the only administration system required is an accounting or bookkeeping system that produces a statement showing business revenue and expenses, and the profit or loss.

The salary is usually low for each employee, this is due to the fact they’re a few or sometimes no employees within the business.

Control for the overall of control, because the owner has a hands-on approach to running ...

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