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Main features of sole traders - Coggle Diagram
Main features of sole traders
The sole trader owns and runs the business
Employ other people, including some empowered to make some decisions
Sole traders make management decisions and have the ultimate responsibility
No legal distinction exists between the business and the sole trader
The sole trader is the business
Have unlimited liability
The finance is usually limited
It comer from their personal savings or other sources (ex: family/ friends/ bank loan)
Have limited finance
Money may be limited, may not want to lend money as there is a high failure rate of start-up businesses
The business is close to the customer
Sole trader is a small business, allows interaction with each customer
Get to know the customers on an individual basis
Allows them to provide a more personalized service than a large business
The sole trader has privacy and limited accountability
Don’t have to declare finance to anyone except the tax authorities
Want to know the profits for taxation
When they borrow money/ enter a financial contract, the lenders/ lessors may need to see financial statements
Have a high degree of privacy
Registering the business is generally relatively easy, inexpensive and quick
Starting and operating as a sole trader is simpler than for other types of legal organizations
Have less paperwork to fill out and file
Make all decisions themselves and don’t waste time discussing for decisions