disadvantages or demerits of sole trading business??????????
Answers
Answer:
Limited capital: Use of limited capital means limited profits only. If there is any necessity to expand business there may not be sufficient resources.
2. Limited skill: As there is only one man the managerial ability is limited.
3. Limited borrowing capacity: The borrowing capacity of a sole trader is limited to the extent of his financial position.
4. Unlimited liability: The creditors can recover their loan amount not only from the properties of the business but also from his personal properties. So his liability is unlimited.
5. Hasty decisions: The sole trader takes all decisions for himself. So there may be hasty and thoughtless decisions.
Answer:
1 Personal Liability.
2 Perceived Lack of Prestige.
3 Some customers will not deal with sole traders.
4 Tax planning limitations.
5 Limited access to finance.
6 No one to share ideas with.
7 Lack of business continuity.
8 Poor work-life balance.
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