Sole traders and Partnerships

A sole trader is a type of business owned by and managed by one individual.
The advantages of this are that it is easy to set up, the owner makes all the decisions so it is fast, and the owner receives all the profits.

The disadvantages of being a sole trader is that it is difficult to raise capital to start up the business, the owner has unlimited liability and the owner may have to work long hours to get the business up and running.

A partnership is a business owned by between two and twenty people who all have a share of the business.

The partnership is made by the people all signing the deed of partnership and has to be renewed if one partner dies or leaves the firm or a new partner is introduced into the firm.

The advantages of a partnership are that the workload can be shared, partners can specialise in certain aspects of the lob more money can be put into the business as capital.

The disadvantages of a partnership are there is still unlimited liability, it costs a lot to make a deed of partnership and partners am argue which can divide the business.

By Lenzie Academy Int 2 BM