Sole trader in Business studies

Sole trader is a person who manages and operates a business by himself. People with limited capital start this kind of business. The Sole trader is the most common and popular form of business. The sole trader has many advantages and disadvantages. Most of the businessmen claim that the advantages of operating as a sole trader outweigh the disadvantages of operating as a sole trader.

The sole trader can also be referred to as the sole proprietor.

Advantages of a Sole trader

The sole trader can start the business with limited capital

Sole trader does not have to share the profit of the business

There is not interference by other people

The sole trader is able to develop a very unique kind of relationship with the customer

Sole trader does not have fulfill legal requirement to start the business

Sole trader has the liberty to take all the decisions by himself

Sole trader does not have manage a lot of things as the sole trader has to do limited tasks

The sole trader can spend more time with the family

Quick decision making


Disadvantages of a Sole trader

There is no continuity

The sole trader has a limited amount of capital to grow

It is very difficult for the sole trader to get loan facility

There is a lack of ideas, as people do not suggest their ideas

The sole trader has unlimited liability

Sole trader has to perform all the tasks himself

Sole trader is unable to achieve specialization in his or her related field


Rating 3.00 out of 5

Leave a Reply