A sole trader is an individual who is the owner of the business. Sole traders work for themselves and re not employed directly by any other businesses. An sole trader can be referred to as self-employed. Sole traders can be engaged in an almost limitless range of potential activities, including:
- Beauticians
- Plumbers
- Writers
- Models
It's estimated that there are over 3 million sole traders in the United Kingdom. Sole traders are very opportunistic and are essentially entrepreneurs in many ways. When they see a potential niche, they attempt to exploit it.
Liability and Legal Issues Affecting Sole Traders
Sole traders are completely liable for every aspect of their business. There's legally no distinction between the funds of the sole trader business and the potential funds of the proprietor. This is called Unlimited Liability. In the even that a sole trader business takes out a loan which it's unable to repay, then it would be totally liable and would have to use personal savings, investments and assets to repay the loan. By law, a sole trader must keep accurate accounting records for the business.
Consumer protection is another legal issue that affects sole traders. The business needs to provide the best standards for every consumer. Regardless of any costs incurred, the business has to be responsible in every way and where necessary will need to utilise personal assets when it becomes necessary.
No comments:
Post a Comment