Podcast
Questions and Answers
What is the primary characteristic of a sole trader?
What is the primary characteristic of a sole trader?
- Operates as part of a partnership
- Has shareholders and board of directors
- Employs a large workforce
- Runs their own business independently (correct)
Which of the following best describes the financial liability of a sole trader?
Which of the following best describes the financial liability of a sole trader?
- Limited liability for business debts
- Corporate liability only
- Unlimited personal liability for business debts (correct)
- Shared liability with partners
Which statement about a sole trader is false?
Which statement about a sole trader is false?
- They can make all decisions independently
- They must operate with at least one business partner (correct)
- They retain all profits made from the business
- They can employ people to help in their business
What advantage does a sole trader often have compared to larger business structures?
What advantage does a sole trader often have compared to larger business structures?
Which of the following is NOT typically associated with being a sole trader?
Which of the following is NOT typically associated with being a sole trader?
Study Notes
Sole Trader
- A sole trader is a self-employed individual who runs their own business.
- They are responsible for all aspects of the business, including finances, legal obligations, and operations.
- Sole traders are not separate legal entities from the owner, meaning the owner is personally liable for all business debts and obligations.
- The business is typically small and operated on a personal basis.
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Description
This quiz explores the concept of a sole trader, a self-employed individual who manages their own business. It covers aspects such as personal liability, business operations, and legal responsibilities. Gain a comprehensive understanding of the sole trader structure and its implications for small businesses.
