Question

What is sole trading? Explain the merits and demerits of sole trading.

Answer 1

trading by soul is known as soul trading

Answer 2

Sole trading is a type of business entity.
A sole proprietorship also known as the sole trader individual interpreter ship for proprietorship is a type of enterprise that is owned and run by one person.

Advantages of sole trading include that:Advantages of sole trading include that:

you’re the boss

you keep all the profits

start-up costs are low

you have maximum privacy

establishing and operating your business is simple

it’s easy to change your legal structure later if circumstances change

you can easily wind up your business.


Disadvantages of sole trading include that:

you have unlimited liability for debts as there’s no legal distinction between private and business assets

your capacity to raise capital is limited

all the responsibility for making day-to-day business decisions is yours

retaining high-calibre employees can be difficult

it can be hard to take holidays

you’re taxed as a single person

the life of the business is limited.