Sole Traders

Evaluation

A sole trader has the advantage of making all decisions alone. This is great as there won't be any disagreements however if you need a second opinion, you are essentially alone. This creates the disadvantage of there being a lot of pressure on one person. Sole traders are quick and easy to set up and you get all the profits however it might still be difficult to raise funds to expand. Also, the sole trader has unlimited liability. This isn't great as it means the sole trader is legally responsible for all the debts of the business. The business is also unincorporated meaning the business doesn't have it's own legal identity. This means that if someone sues the business, they sue you personally. Overall, the advantages would outweigh the disadvantages because it gives the owner a challenge and independence.