2.1 Sole traders

• A sole trader is a business that is owned and controlled by a single individual
• Match the business organization with its ownership structure:

  Sole Trader ↔️ Single owner

  Partnership ↔️ Multiple owners

  Limited Company ↔️ Shareholders
• Unlike partnerships, a limited company offers limited liability to its owners.
• Arrange the following business organizations by their taxation methods:

  1️⃣ Sole Trader (Taxed as personal income)

  2️⃣ Partnership (Taxed as partnership)

  3️⃣ Limited Company (Taxed as a separate legal entity)
• The owner of a sole trader business is responsible for all business decisions and activities.


  True
• Unlimited liability means the sole trader's personal assets can be used to pay business debts.

  True
• In a sole trader business, the owner has unlimited liability
• Match the business organization with its liability type:

  Sole Trader ↔️ Unlimited liability

  Limited Company ↔️ Limited liability
• The owner of a sole trader business is personally liable for all business debts.


  True
• Sole traders retain all profits generated by the business.
• One major disadvantage of a sole trader business is unlimited liability.
• A sole trader retains all profits generated by their business.


  True
• What is a limitation sole traders face in comparison to partnerships or limited companies?

  Limited access to capital
• Sole traders must handle all aspects of their business, limiting their ability to specialize.


  True
• Order the business structures from lowest to highest access to capital:

  1️⃣ Sole Trader

  2️⃣ Partnership

  3️⃣ Limited Company
• What is a key characteristic of a sole trader business in terms of ownership?

  Single owner
• Match the business structure with its taxation type:

  Sole Trader ↔️ Taxed as personal income

  Partnership ↔️ Taxed as partnership

  Limited Company ↔️ Taxed as a separate legal entity
• Sole traders have unlimited liability
• What does a sole trader retain all profits generated by their business?

  As the sole owner
• A sole trader retains all profits generated by the business.

  True
• What is the main disadvantage of a sole trader business in terms of liability?

  Unlimited liability
• Sole traders often handle all aspects of the business, which leads to a lack of specialization
• What is the key legal implication for a sole trader?

  Unlimited liability
• Limited companies have limited liability, unlike sole traders.
• Sole traders are taxed as a separate legal entity.

  False
• The owner of a sole trader business has unlimited liability for all business debts.


  True
• In a limited company, ownership and control are typically separated.


  True
• Match the business organization with an example:

  Sole Trader ↔️ Self-employed plumber

  Partnership ↔️ Law firm

  Limited Company ↔️ Apple Inc.
• One key characteristic of a sole trader is the simplicity of management
• Match the business organization with its ownership structure:

  Sole Trader ↔️ Single owner

  Partnership ↔️ Multiple owners

  Limited Company ↔️ Shareholders
• The owner of a sole trader business has full control over its management.


  True
• A sole trader is taxed as personal income.
• Arrange the advantages of a sole trader business by their impact on decision-making:

  1️⃣ Simplicity of Management

  2️⃣ Flexibility

  3️⃣ Retain all Profits
• Flexibility allows a sole trader to quickly adapt to changing market conditions.


  True
• What is a key advantage of setting up a sole trader business in terms of management?

  Simplicity of management
• A major disadvantage of a sole trader business is its unlimited liability
• A sole trader business is characterized by its simplicity of management
• Which of the following is an example of a sole trader business?

  Self-employed plumber
• Sole traders are easy to set up and operate without extensive formalities.


  True
• What is one advantage of setting up a sole trader business in terms of management?

  Simplicity of management