Sole traders - Business ownership - AQA - GCSE Business Revision - AQA - BBC Bitesize (2024)

Sole traders

A sole trader is a business that is owned and run by one person. There is only one owner, but they may have employees who work for them. Sole traders are usually start-ups or small businesses. For example, photographers, electricians, hairdressers, graphic designers, social media influencers, bloggers, small online clothing brand owners and beauty therapists may set up as sole traders.

Sole traders have and the owner is personally responsible for the debts of the business. A sole trader pays on their earnings.

Sole traders - Business ownership - AQA - GCSE Business Revision - AQA - BBC Bitesize (1)
See Also
Corporations

Some advantages of sole trading

  • it is quick and easy to set up as a sole trader.
  • the business owner(s) have a lot of control over the business and its money.
  • it gives individuals the opportunity to be their own boss and make all the business decisions.
  • it has low set-up costs.

Some disadvantages of sole trading

  • it has the risk of unlimited liability.
  • it can involve long work hours and stressful conditions.
  • there is a high level of responsibility for the owner.
  • often the owner performs many different roles in the business.
Sole traders - Business ownership - AQA - GCSE Business Revision - AQA - BBC Bitesize (2024)

FAQs

Sole traders - Business ownership - AQA - GCSE Business Revision - AQA - BBC Bitesize? ›

A sole trader is a business that is owned and run by one person. There is only one owner, but they may have employees who work for them. Sole traders are usually start-ups or small businesses.

What is a sole trader ownership? ›

A sole trader is the simplest business structure available to someone wanting to set up a business. One person is the owner/operator of the business, so they have full control. Setting up as a sole trader is easy and cheap because there aren't many legal and taxation formalities.

What type of business ownership is a sole trader? ›

Sole trader

This type of business is owned and managed by one individual. There's no legal distinction between the owner and the company, meaning that all debts and after-tax profits are personally yours - this is called 'unlimited liability'.

How to revise for AQA business GCSE? ›

Streamline your study approach and maximize your potential for a top-grade performance:
  1. Understand The Syllabus. ...
  2. Create A Study Schedule. ...
  3. Utilize Varied Resources. ...
  4. Visual Aids & Diagrams. ...
  5. Active Note-Taking. ...
  6. Practice Past Papers. ...
  7. Group Discussions. ...
  8. Teach Yourself.

What is sole trader and its advantages and disadvantages? ›

Sole traders are completely in charge of their business. This means they make all the decisions and keep all the profit. However, it can be more difficult to raise funds as sole traders are typically less trusted than limited companies, as there's only one person involved.

What is a sole trader GCSE business? ›

A sole trader is a business that is owned and run by one person. There is only one owner, but they may have employees who work for them.

What is sole trader example? ›

What is a sole trader? If you are an individual and you work for yourself, you are classed as a sole trader. You may also have people working for you. Common examples of sole traders include builders, plumbers, electricians, painters and decorators, taxi drivers and window cleaners.

What are 10 advantages of a sole trader? ›

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 circ*mstances change you can easily wind up your business.

What are the 3 main characteristics of a sole trader? ›

Single ownership, personal liability and direct control are the three main characteristics of a sole trader or sole proprietor.

What is sole trader and its characteristics? ›

Sole traders run their businesses as individuals, meaning they can keep all their profits and are responsible for all the losses. Several rules apply to sole trading, including naming conventions and rules on business operations, including the requirement to register for self-assessment tax.

Is business GCSE hard? ›

The subject matter is generally easy to grasp, often drawing upon common sense and real-world examples. Examinations in Business Studies typically feature short answer and multiple-choice questions, primarily assessing students' knowledge of fundamental concepts.

How do you get a 9 in GCSE business? ›

Scoring a 9 in GCSE Business entails adopting effective study habits, such as thorough revision, practising past papers, and seeking feedback.

How do I get good at GCSE business? ›

Keep your file and exercise book organised and updated with all notes and class activities. by listening to or reading daily business news. Listen to local and national and international news. news: television, radio, social media such as Facebook and Tweeter and newspapers.

Is a sole trader good or bad? ›

The main benefits of being a sole trader include less paperwork, more earning potential, better work-life balance, low overheads, easy registration, and total privacy. Disadvantages of sole traders include unlimited liability, less customer trust, and a complex business transfer process.

What are the 4 disadvantages of a sole trader? ›

We'll now drill down into some of the potential drawbacks and so-called disadvantages of being a sole trader:
  • Unlimited liability. ...
  • Potential credibility issues. ...
  • Sole responsibility. ...
  • Fewer tax planning opportunities. ...
  • Barriers to finance. ...
  • Sale limitations.

Why is sole trader important? ›

As the sole company manager, a sole trader can make independent decisions without the formalities often associated with partnerships or corporate structures. Such autonomy allows them to experience the positive outcomes of their choices directly.

Why would a person choose a sole trader as a form of ownership? ›

Sole traders are the most popular form of business due to their simplicity, flexibility, and minimal legal requirements. As a sole trader, individuals have complete control over their business decisions, retain all profits, and have simplified tax obligations.

What are 3 examples of sole proprietorships? ›

We've compiled a list of eight different types of businesses that make good sole proprietorship examples.
  • Freelance Writer. A freelance writer provides written content for clients, either for print or digital publication. ...
  • Photographer. ...
  • Personal Trainer. ...
  • Plumber. ...
  • Freelance Graphic Designer. ...
  • Housekeeper. ...
  • Bakery Owner. ...
  • Tutor.
Dec 28, 2023

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