What would be consequecy of a sole trader?

Answer 1

A sole trader, operating as an individual business owner, faces unlimited liability, meaning personal assets are at risk if the business incurs debts or legal issues. This structure allows for complete control over decision-making but can lead to challenges in raising capital and scaling the business. Additionally, a sole trader may experience higher tax rates on profits compared to corporate structures. The lack of continuity can also pose risks, as the business is directly tied to the owner’s lifespan and capacity to work.