SOLE TRADER VS PATNERSHIP

• What is the focus of objective number six in the CSEC principles of business syllabus?

  Describing various forms of business organizations
• What are the first two business forms discussed in the lecture?

  Sole trader and partnership
• Why do students often compare sole traders and partnerships?

  To understand pros and cons of each
• What is another name for a sole trader?

  Sole proprietor
• What is a key characteristic of a sole trader?

  They own the business alone
• How do sole traders typically operate their businesses?

  They may have employees but own alone
• What type of businesses are most commonly sole traders?

  Small businesses
• What does it mean for a sole trader to have unlimited liability?

  They are personally responsible for debts
• What happens if a sole trader's business fails?

  They are liable for all debts incurred
• How does unlimited liability affect a sole trader's financial risk?

  They risk losing personal assets for debts
• What is an example of a sole trader business?

  A small shop or food stall
• How do sole traders typically manage their businesses?

  They may choose their own hours and operations
• What is a common misconception about sole traders?

  That they work alone without any help
• Why might some sole traders struggle with technology?

  They may lack resources to adopt it
• What is a key feature of sole trader businesses regarding registration?

  Business names should be registered
• What happens if someone is injured in a sole trader's business?

  The sole trader is personally liable
• What are the key characteristics of a sole trader business?

  • Owned by one individual
  • Unlimited liability for debts
  • Typically small in scale
  • May employ others but operates independently
  • Business name should be registered
• What are the pros and cons of being a sole trader?

  Pros:

  • Full control over business decisions
  • Simple to set up and operate
  • Direct access to profits

  
  

  Cons:

  • Unlimited liability for debts
  • Limited access to capital
  • Potential for poor management
• What is a sole trader business?

  A business owned by one person
• What is a common example of a sole trader?

  A mom-and-pop shop
• What must a sole trader do regarding their business name?

  Register the business name
• What happens if someone gets injured in a sole trader's store?

  The sole trader is personally liable
• How is a company viewed legally compared to a sole trader?

  A company is viewed as a legal person
• What must all businesses in Britain register with?

  Tax authorities and national insurance
• Why is it wise for small businesses to register?

  To gain access to perks and benefits
• What is a disadvantage of being a sole trader regarding liability?

  Unlimited liability for debts
• What does unlimited liability mean for a sole trader?

  They can lose personal assets for debts
• What is a consequence of a sole trader's business failing?

  The owner bears all losses
• What happens if a sole trader causes damage in their business?

  The sole trader is responsible for damages
• Why is it difficult for sole traders to raise finance?

  They are seen as higher risk by banks
• What is a disadvantage of being a sole trader regarding time off?

  Difficult to take time away from business
• What does lack of continuity mean for a sole trader?

  The business ends if the owner dies
• What are the advantages of being a sole trader?

  • Easy to establish a business
  • Few paperwork requirements
  • Owner can make decisions alone
  • Owner takes all profits
• What are the disadvantages of being a sole trader?

  • Unlimited liability for debts
  • Responsible for all damages caused
  • Difficult to raise finance
  • Hard to take time away
  • Lack of continuity if the owner dies
• What is a partnership?

  A business owned by two or more people
• What is a common type of business that operates as a partnership?

  Law firms
• How can partnerships benefit from technology?

  They can run profitable businesses online
• What is a key characteristic of partnerships?

  Two or more people own the business
• What is a potential advantage of partnerships over sole traders?

  Shared responsibilities and resources
• What is a partnership?

  Two or more people own a business together