Sole Investor Essay

A sole investor business:

•is owned by one person

•has unlimited legal responsibility

•is thought to be a separate organization for accounting purposes •is not a legal entity in its own correct.

A only trader can be described as person who is a only owner of a business. A single trader looks forward to many positive aspects, including economical start-up costs and a simple means of establishment. The master makes his or her own decisions and is allowed to all the profits of the organization. However , a sole investor must bear all losses and, in law, the proprietor and business are considered to be the same organization. Thus the only trader has unlimited liability and personal property can be used to spend business debts if the organization becomes insolvent. Sole trader is the desired form of enterprise for many small companies because of the personal control and simplicity of setting up this type of business, but the owner has the disadvantage of unlimited liability. •A singular trader can be described as person who is definitely the only owner of a organization. •The accounting entity presumption assumes the fact that owner and business will be separate for the functions of accounting. This is unlike legal entity where the owner is held accountable for the debts in the business. •A sole investor may have to comply with a number of rules when starting up a business, which include obtaining a great ABN and registering an enterprise name. •Service and trading businesses differ in what they supply to the customer. A service business (such being a dentist or perhaps plumber) supplies services when a trading business (such as a butcher or clothing retailer) sells products. Some businesses provide both equally services and products