Sole Trader / Owner-Managed Business
When thinking about starting a business, you might as well give some consideration to becoming a sole trader. A sole trader is the simplest and most common type of business structure. It’s also the least expensive type to set up and run. You’re considered as “self-employed” and the manager of your business, although you may pay contractors to help you out.
Under the law, you and your business are technically the business, which means you’re personally responsible all aspects of the business, including its legal obligations.
The advantages of a sole trader include the sole trader enjoys the profits alone and decision making is easy while the disadvantages include the sole trader has unlimited liability and also so many responsibilities to take alone. A sole trader also has unlimited sources of capital.
Benefits of being a sole trader
- You’re the boss
- You keep the profits
- Start-up costs are minimal
- Establishing and operating your business is simple
- Easy to change your legal structure later if circumstances change