Sole Trading Concerns in Tourism and Hospitality
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Questions and Answers

What is the main characteristic of a sole trading concern?

  • Multiple owners and shared control
  • Limited liability for the owner
  • Separation of business and personal assets
  • One individual owns and operates the business (correct)

    • What is a consequence of unlimited personal liability in a sole trading concern?

  • The owner's personal assets can be seized to settle business debts (correct)
  • The business is required to disclose financial information to the public
  • The owner's personal assets are protected from business debts
  • The owner has limited control over business operations

    • What is an advantage of a sole trading concern in terms of decision-making?

  • The owner has complete control over the business operations and decision-making process (correct)
  • The owner has to consult with a board of directors
  • The owner has to disclose financial information to the public
  • The owner has limited control over business operations

    • What is a benefit of a sole trading concern in terms of taxation?

    <p>Business income is taxed as personal income, which can result in lower tax rates</p> Signup and view all the answers

    What is an advantage of a sole trading concern in the tourism and hospitality industry?

    <p>Sole proprietors can provide a personalized touch to customers</p> Signup and view all the answers

    What is a characteristic of a sole trading concern in terms of business operations?

    <p>Sole trading concerns can quickly adapt to changes in the market or industry</p> Signup and view all the answers

    Study Notes

    Sole Trading Concerns in Tourism and Hospitality

    Definition

    A sole trading concern is a type of business ownership where one individual owns and operates the business.

    Special Features

    1. Unlimited Personal Liability

    • The owner has unlimited personal liability, meaning their personal assets can be seized to settle business debts.

    2. Sole Ownership

    • One individual owns and controls the business, making all decisions.

    3. Unlimited Control

    • The owner has complete control over the business operations and decision-making process.

    4. Flexibility

    • Sole trading concerns can quickly adapt to changes in the market or industry.

    5. Confidentiality

    • Business information and financial records remain confidential, as the owner is not required to disclose information to the public.

    6. Tax Benefits

    • Business income is taxed as personal income, which can result in lower tax rates.

    7. Ease of Formation and Closure

    • Starting and closing a sole trading concern is relatively easy and inexpensive.

    8. Direct Motivation

    • The owner is directly motivated to work hard, as their personal wealth is directly tied to the business's success.

    Advantages in Tourism and Hospitality

    1. Personal Touch

    • Sole proprietors can provide a personalized touch to customers, enhancing their experience.

    2. Flexibility in Services

    • Sole trading concerns can quickly adapt services to meet changing customer demands.

    3. Competitive Pricing

    • With lower overhead costs, sole proprietors can offer competitive pricing to attract customers.

    4. Personalized Customer Service

    • Owners can build strong relationships with customers, leading to customer loyalty and repeat business.

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    Description

    Learn about the definition, special features, and advantages of sole trading concerns in the tourism and hospitality industry. Understand the benefits and characteristics of this type of business ownership.

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