A sole trader is a business that is owned and controlled by one person. This is very attractive for those who wish to retain ownership of the business. A “sole trader” is described as a person trading under his / her own name, or a registered business name. Many sole traders decide to operate under their own name and do so without any problem. However, if you use a name other than your surname, you must register the name in accordance with the Registration of Business Names Act of 1963 for a small registration fee.
Advantages of the Sole Trader
The sole trader is not required to file accounts which would be available for inspection by the public.
Fewer legal formalities compared to other structures.
The income from the business is personal income and expenses which are incurred “wholly and exclusively” in the course of the trade are allowable deductions.
Closure of the business requires less formality.
Disadvantages of the Sole Trader
The owner is personally liable for all debts of the business.
Raising capital can be more difficult.
The life of the business depends entirely on the owner.