Business & Finance
Business Plans
Business and Industry

What is a sole trader?

User Avatar
Wiki User
2009-05-21 16:54:15

A sole trader is one type of business organization. Or I would

say a sole trader is among the many types of organization that

exist in a business environment. If you are a sole trader, it means

that you own the business, and any profits from the business

belongs to you. It's important to know that there are other types

of business organizations like partnership or limited companies. A

partnership is where you and another partner owns the business. (

it may not necessarily be 50% each, it depends on the agreement of

each partner ). Limited companies on the other hand, are companies

that can offer shares to raise capital. Although this is

complicated, you need to understand that while sole trader can earn

all the profits, it will face difficulties in raising funds for

expansion, that's the reason limited companies are formed, they can

raise funds from the public.

Copyright © 2020 Multiply Media, LLC. All Rights Reserved. The material on this site can not be reproduced, distributed, transmitted, cached or otherwise used, except with prior written permission of Multiply.