6 Questions
What is the main disadvantage of being a sole trader?
Limited liability
What happens to a sole trader business when the owner gets ill or quits?
It will cease to exist
What is one advantage of being a sole trader in terms of decision-making?
Owner has complete decision-making control
Explain the concept of unlimited liability as it relates to a sole trader business.
The owner of a sole trader business is personally responsible for all debts incurred by the business, risking their private assets to cover any unpaid debts.
Discuss the impact of limited access to capital on a sole trader business.
Limited access to capital means that the owner must rely on their own funds to finance the business, restricting growth potential.
How does the limited lifespan of a sole trader business affect its sustainability?
The limited lifespan of a sole trader business poses a risk as it can cease to exist if the owner becomes ill, quits, or passes away, leading to uncertainty and potential business closure.
Test your knowledge on sole traders, individuals who own and run a business on their own. Explore the advantages, disadvantages, and characteristics of being a sole trader.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
