Sole Traders, Partnerships and LTDs

Unincorporated businesses:

• The owner is the business - no separate legal entity.
• The owner has unlimited liability.
• Most of these operate as sole traders.

Incorporated businesses:

• There is a legal difference between the company and its shareholders.
• Shareholders have limited liability.
• Most of these operate as private limited companies.

Sole Trader

Pro - Very easy and cheap to set up.

Pro - The owner has complete control over decision making.

Pro - Minimal paperwork and no legal costs.

Con - Full personal liability (unlimited liability).

Con - Harder to raise finance - limited funds and security.

Con - Business can be…