Sole Trader

Brody Moodie
Mind Map by Brody Moodie, updated more than 1 year ago
Brody Moodie
Created by Brody Moodie about 6 years ago
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Description

forms of ownership

Resource summary

Sole Trader
  1. characteristics
    1. own business on your own
      1. responsible for all financial and management decisions
        1. responsible in an ethical, administrative and legal way
          1. easiest form of business to set up
            1. no requirements, application, legal forms or processes to follow
            2. Advantages
              1. owner makes all decisions
                1. Requires very little capital to start up
                  1. All profits belong to owner
                    1. Management structure is simple
                      1. dynamic and flexible business can adapt to the needs of a custormer
                        1. owner invests passion and interest to achieve goals
                          1. no legal processes and requirements
                          2. Disadvantages
                            1. unlimited liability, owner is responsible for all debt
                              1. cash flow is often a problem
                                1. Growth can be restricted due to lack of capital
                                  1. not a legal entity
                                    1. management and decision making done by one person
                                      1. Difficult to attract highly skills and knowledgeable employees
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