Sole trader is a person who carries out the trade/ business single handedly. He is the whole and soul of the business. Usually, there is no one to assist him; though in some cases he might keep an assistant or a helper.
The following are the distinguishing features of a sole trader:
1) He is responsible for the entire business. He is responsible for all the affairs pertaining to the business.
2) The law does not make any distinction between the owner and his business. In the eyes of the law, both the owner and his business are the same.
3) Since the law does not distinguish between the owner and his business, his liability is unlimited. For e.g. If the business goes bankrupt, the owner will have to cough money from his own assets and financial reserves to pay to the creditors and lenders.
4) The sole trader is also liable to pay for any legal compensation that might arise in the course of running the business. He cannot shrug his responsibilities. He will not be able to defend himself by saying that the act was committed by his business and not by him.
5) The sole trader has the final say as far as decision-making is concerned. He is not legally bound to listen to anyone. He may do whatever he deems to be fit.
6) Since he has the freedom to take all the decisions, he is also responsible for them. For e.g., There is a bread manufacturer, [who is also a sole trader], who introduces a new variety of bread, thinking that there is demand for this particular variety. If the product succeeds, he can take the credit. If the product fails and as a consequence he suffers losses, then he will be held for the losses. The buck starts as well as stops with him.
7) He keeps the entire profit earned by him. Similarly he also has to shoulder the entire burden of loss.
8) A sole trader has to maintain financial records that distinguish between money used for personal and business purpose. For e.g. If he sends a letter to his wife, the postal expenditure will be treated as personal. But if a letter is sent to a prospective customer, it will be treated as expenditure incurred for business purpose.
9) A sole entity might come to an end if the owner becomes bankrupt or has an untimely demise, with no one to look after the business.
Sole trader is the person who run the business own and operated for its own profit or we can say that he owns and risk all and gain all.
The sole proprietor owns the business individually. It business usually small in size so it manages by the owner. He may have some paid workers to assist him but ultimate controls rests in his hand. He provides necessary capital for run the business. He may borrow this capital from resources such as friend or bank if it needs. The trader himself bears all risks. No body else has any stake in business. The sole trader is personally liable for debts of the business. The creditor can lay claim not only on his business assets but also his personal property such as car, house, furniture etc to recover the loan. In the eyes of law3, the sole trader and his business are considered as one. In other words we can say that the sole trader and business all assets and liabilities are same. The sole trader runs its business individually so generally their relationships with customer are strong and all customer known him personally. Sole trader's represents about more then 70% of all business.
A sole trader is a person who prefers to do business on his own without affiliation to a company or partners. A sole trader will bear full responsibility of any profits or losses the business may incur.
A sole trader may also be called a sole proprietor. The sole proprietor of any professional practice is called a sole practitioner. A sole trader's accounts refer to the accounts and financial statements of an enterprise that are borne by a single individual.
A sole proprietorship is a business enterprise that has no separate legal existence apart from its owner. Accordingly the limitations of liability that limited liability partnerships and corporations enjoy do not apply to these sole proprietorships. In spite of this, these ventures have many plus points, for one; there are no managerial disputes as the proprietor has total control. Another obvious advantage is that these ventures are extremely conducive to quick decision making and many cumbersome legal formalities can conveniently avoided.
The sole trader ship means the business unit ownership and management is under control of one person. The sole trader is also called sole proprietorship or one man business. In sole trader the owner is not only the owner the all capital but also take all profit or loss responsibility. In sole trader the owner has unlimited liability. In law, the sole trader and the business are considered as one. In sole trader ship no legal formalities are requires for formation and dissolve of business.
The sole trader ship is easily to format and organized. The person enters into a sole proprietorship is as simple as buying newspapers and selling in street. A person has to develop an idea, set the goals and then develop it into a profitable operation. The sole proprietorship has full authority to manage his business as he like. He receives full profit of the business. He also bears the full risk of loss. As long as the proposed business is legal, anyone can organize it without going through any special formality
A sole trader or sole proprietorship is a business entity which does not have any separate existence from its owner. In sole trade the owner of the business is responsible for the complete profits and risks of the business therefore, like corporations, he cannot enjoy the limitations of liability. All debts of the business are the debts of the sole trader and same is the case with the revenues. Sole traders are very common but these are usually small businesses and only one person does business in his/her own name.
Sole trader business is the business that has no co partners in doing the busines .This means one will always find one individual in the business.
The characteristics of Sole Trader Business are as below:
The are independent in running the Business.They have no shares with other business like in Partneship trade business,they own their own profits and losses,they are a small entity in business,its usually with one person to run the business.
Formation of sole-Trader ship is very simple, because there are no special legal formalities like permission from government, preparation of necessary documents, registration etc required to start the business as sole trader ship. One can start the business at any time and at any place according to his financial capacity. This feature of sole trader ship attracts of the invertors to start the business as sole trader ship.
The dissolution of sole-trader ship is also very simple just like its formation. When the owner of the business feels that the business is going to suffer the losses, he may dissolve the business and makes his investment safe. It is only form of business organization that provides maximum benefits to the owner. There is no distribution of profit. Owner of the business receives 100% profit of the business. Investment is sole-trader ship is not freeze in nature. Owner of the business is in a position to withdraw and to make further investment in the business when he wants.
It is very simple to change the nature of business according to change in market trends due to entire control and less resources. A person who is doing the business of fast food may involve n the business of cloth at night. Hence it is a flexible from of business organization.
The sole ownership means the business unit ownership and management is under control of one person. The sole trader is also called sole proprietorship or one man business. In sole trader the owner is not only the owner the all capital but also take all profit or loss responsibility. In sole trader the owner has unlimited liability. In law, the sole trader and the business are considered as one. In sole proprietorship no legal formalities are requires for formation and dissolve of business.
The sole tradership is easily to format and organized. The person enters into a sole proprietorship is as simple as buying newspapers and selling in street. A person has to develop an idea, set the goals and then develop it into a profitable operation. The sole proprietorship has full authority to manage his business as he like. He receives full profit of the business. He also bears the full risk of loss. As long as the proposed business is legal, anyone can organize it without going through any special formality.
The most serious drawback of the sole proprietorship is the burden of unlimited liability. An individual proprietor faces difficulty in expanding the sole trading business. In managing this type of business, the sole trader has to rely upon his own skill and judgment for operating the business. Most of the sole trader does not possess all the management skill required for financing, marketing, purchasing, producing, and supervising of the business. The continuity or permanence of a sole trader is normally difficult to maintain.
There is not Act or Ordinance to regulate the working of sole-trader ship in Pakistan. One can start the business at any time and at any place according to his finance capacity. He can also wind up his business when he desire. It is clear from the above definition that it is form of business organization that is owned by one person.
Sole trader manages and controls all the affairs of the business independently without the interference of any other person. He makes plans, policies and programs for the success of his business. He is not bound to consult any one in taking a decision. It is the only form of business organization that provides 100% benefits to its owner due to single ownership. Similarly a single person is liable to bear all the tasks of the business. There is no distribution of profit and loss. This from of business organization is not suitable for large scale due to limited resources, limited managerial abilities and limited skills.
It is also known as entity principle. According to this principle owner and business are two different entities for record keeping purpose. Record of business transactions must be kept separately from the personal transactions of the owner, in order to check the true results of operations of the business.
My choice of pick for my information and organisation assignment is a sole trader.
A sole trader is a someone who prefers to do business on his own without asking for a company help or a partners.
A sole trader will is full responsible of any profit or losses that business may incur.
A sole trader can be called a sole trader.
The sole proprietor of any professional practice is called a sole practitioner.
A sole trader keeps an account of everything in the business.
The limitations of liability do not apply to sole proprietorships.
Sole traders are extremely conducive to quick decision making and many cumbersome legal formalities can conveniently avoided.
Who ever is helping me I am very thankful, but all I want to know is the feature characteristics of sloe trader
I believe you are concerned about a sole proprietorship. Following are its characteristics:
- It has no separate existence from its owner
- Unlimited liability of the owner
- The owner has no partners.
- Income taxes are paid rather than corporate taxes
- No double taxation
- It dissolves with the death of the owner
Sole trader who run the business his own name .he does not want any affiliate to the company
There are no legal formalities other that a licence to trade
The owner is taxed on business profits in his own hands
it is a legal entity or juristic person