Sole tradership
An unincorporated business entity with a single owner. The business may be under the owner’s name or a registered business name, but in either case, the owner and the business are legally inseparable.
The advantages of sole tradership include:
- It is cheap to set-up
- It is simple
- No need to rely on others (independent)
The disadvantages (often realized when the business grows) include:
- Unlimited liability – owner’s assets may be required to pay business debts
- Personal tax rates = potentially higher tax
- Illness or incapacity curtails the business
- Death of the sole trader often practically means cessation of the business