• Stella Jansen

Sole proprietorship – advantages and disadvantages

If your business is small and the capital investment is minimal, you might consider operating as a sole trader.

A sole trader has the following advantages:

  • 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 is easy to change the legal structure of your business later on if circumstances change.

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.

Thinking it’s time you made a change of accountant, please give us a call (07) 3804 7575. With over ten years of combined experience working with a diverse range of clients, Accountants 360 is well equipped to assist your business. We offer Bookkeeping and Tax Services and would love to help you succeed.

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