Understanding Sole Traders

What is a sole trader?

• A business owned by multiple partners

• A non-profit organization

• A business owned by a single individual

• A corporation with limited liability

Which of the following is a benefit of being a sole trader?

• Complex tax procedures

• Shared profits with shareholders

• Need to publish accounts

• Full control over business decisions

Why might a sole trader prefer not to publish accounts?

• To keep financial information private from competitors

• To avoid paying taxes

• To comply with government regulations

• To attract more investors

What is a major disadvantage of being a sole trader?

• Shared decision-making

• Limited liability

• Unlimited liability

• Easy access to finance

How does unlimited liability affect a sole trader?

• It protects personal assets from business debts

• It puts personal assets at risk if the business fails

• It allows for easy business expansion

• It requires the business to issue shares

What challenge might a sole trader face when trying to expand?

• Excessive government support

• Inability to issue shares

• Abundance of financial resources

• Too many skilled employees

Why might a sole trader find it difficult to take a holiday?

• They have too much free time

• They have unlimited liability

• The business relies solely on them

• They have too many employees

What does the 'P' in the PLUMS framework stand for?

• Public relations

• Personnel management

• Profit distribution

• Product quality

In the PLUMS framework, what does 'L' represent?

• Legal obligations

• Limited liability

• Long-term goals

• Leadership style

What is a key consideration for a sole trader thinking of becoming a private limited company?

• Maintaining unlimited liability

• Retaining full control over decisions

• Accessing more sources of finance

• Avoiding any form of expansion