Question

Discuss the merits and demerits of sole trading form of business.

Answer 1

The merits of sole trading concern are -

1)The sole can start up a business as per his desire.

2)The sole trader can shut down the business anytime he wants.

The demerit of sole trading form of business are -

1)The trader has unlimited liability and thereby if the business goes on to debts then the trader is compelled to pay the debts all by himself else all his assets will be confiscated.

Answer 2

Answer:

As a sole trader you retain all the profits from the business, rather than having to share them with other shareholders (or leave profits in the business). Many sole traders choose not to employ anyone, which can keep costs low and maximise profits available to them.