United Kingdom Encyclopedia of Law     Wiki Legal Encyclopedia (BETA)
What do you need to know about law? Search in more than 1.500.000 entries

Sole Trader in United Kingdom

A sole trader is the most common form of business ownership and the easiest to set up. It means that the business is owned and run by one person – though the business may employ a large number of people. The owner will normally provide the money to set the business up, but he or she could borrow money from a bank or other financial institution. The first likely objective of the sole trader will be survival as many new businesses run out of money in their first few months of trading.

ADVANTAGES OF BEING A SOLE TRADER

A sole trader is the easiest form of business to set up. All you have to do is offer a good or service for sale and you are a sole trader! No special paper work is required, so a sole trader is able to start business immediately.

They are usually small businesses, so less money is required to set them up;
The owner is in sole charge so quick decisions can be made without having to consult others;
The owner gets to keep all of the profits, they don’t have to be shared with others;
Financial information can be kept private;
The needs of local people can be catered for as can special tastes as the owner will know the local market.

DISADVANTAGES OF BEING A SOLE TRADER

If the owner becomes ill or goes on holiday the business may suffer. This can be less of a problem if the sole trader employs a manager or managers. How often the sole trader is prepared to leave the manager in charge will depend upon how much they trust the managers or employees.

Many sole traders work very long hours, as they may be the only ones who work for the business. It may be the case that they are motivated to work long hours because they are working for themselves and they will get the extra profits from their extra work.

Money can be difficult to raise as many banks and other lending institutions will be reluctant to lend to sole traders because they have a higher rate of bankruptcy.

Their prices are often higher than those of larger organisations. This is because sole traders tend to be small and are unable to buy in bulk and benefit from lower prices. Sole traders often join voluntary groups (such as Spar, VG, Mace and Londis) in order to be able to buy in bulk.

The biggest disadvantage for the sole trader is that s/he has complete responsibility for all the debts of the business. This is called unlimited liability. This means the owners can lose all of their personal possessions if they can not pay the debts of the business, i.e., it goes bankrupt.

Feme Sole Trader Definition in English Law

A married woman, who, by the custom of London, trades on her own account, independently of her husband; so called because, with respect to her trading, she is the same as a feme sole. Jacob; Cro. Car. 68. The term is applied also to women deserted by their husbands, who do business as femes sole. 1 Pet. (U. S.) 105. [1]

Resources

Notes

This definition of Feme Sole Trader is based on The Cyclopedic Law Dictionary.



Law is our Passion


This entry about Sole Trader has been published under the terms of the Creative Commons Attribution 3.0 (CC BY 3.0) licence, which permits unrestricted use and reproduction, provided the author or authors of the Sole Trader entry and the Encyclopedia of Law are in each case credited as the source of the Sole Trader entry. Please note this CC BY licence applies to some textual content of Sole Trader, and that some images and other textual or non-textual elements may be covered by special copyright arrangements. For guidance on citing Sole Trader (giving attribution as required by the CC BY licence), please see below our recommendation of "Cite this Entry".

Cite this entry

Legal Citations Generator

(2017, 03). Sole Trader lawi.org.uk Retrieved 05, 2021, from https://lawi.org.uk/sole-trader/

03 2017. 05 2021 <https://lawi.org.uk/sole-trader/>

"Sole Trader" lawi.org.uk. lawi.org.uk, 03 2017. Web. 05 2021. <https://lawi.org.uk/sole-trader/>

"Sole Trader" lawi.org.uk. 03, 2017. Accesed 05 2021. https://lawi.org.uk/sole-trader/

International, 'Sole Trader' (lawi.org.uk 2017) <https://lawi.org.uk/sole-trader/> accesed 2021 May 15

Usage Metrics

1451 Views. 1102 Visitors.

Google Scholar: Search for Sole Trader Related Content

 

Schema Summary

  • Article Name: Sole Trader
  • Author: International
  • Description: A sole trader is the most common form of business ownership and the easiest to set up. It means that the business is owned [...]

This entry was last updated: March 23, 2017

Recent Comments