The main types of business are: • Sole trader • Private limited company • Public limited company
• State-sponsored body • Franchise • Co-operative.
FEATURES OF A SOLE TRADER
The term sole trader describes any business that is started and run by one person. Sole traders may sell goods (e.g. a newsagents, a butcher shop or a farm) or provide a service (e.g. a gardener, an accountant or a beautician).
A sole trader is their own boss. They have the freedom to make all the business decisions and they keep all the profits.
i A sole trader business is owned and run by an individual.
A sole trader business is the most straightforward type of business to set up. However, sole traders do need to get a licence if they want to sell certain goods (such as alcohol) or offer certain services (such as taxi driving).
A sole trader must provide all the money needed to start the business. This is called capital. The money used to start a business is called capital.
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A sole trader is held personally responsible for business debts. This is called unlimited liability.
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Unlimited liability means that a business owner’s personal property may be seized to pay for the debts of their business.
