Sole Trader And Limited Company Essay - 979 Words

SOLE TRADERLIMITED COMPANY JINYU ZHANG contents 1. Introduction 2. Introduction on sole traders and its format of financial statements 3. Limited companies and its format of financial statements 4. Differences between sole traders from that of limited companies in format of financial statements 5. Conclusion 1. Introduction Financial statements are very important in potential investors, management of operator and other stakeholders to make decisions in the business of a company. Different users of financial statements may have different needs of financial information. So finding a proper format of financial statement is significant. This paper will particularly discuss two business models— sole traders and limited companies and their format of financial statements. First, it will give a brief introduction about sole traders and the characteristics of its format of financial statements. Then it will present the characteristics of limited companies and its format of financial statements. At last, the paper will discuss the advantages and disadvantages of each format of financial statements. 2. Introduction on sole traders and its format of financial statements Sole trader can be identified as individual businesses. Sole traders can be defined as an unincorporated business that is run by solely an individual. It is also called as a ‘sole proprietor’ or a ‘sole practitioner’. In addition, simply the sole trader is not only theShow MoreRelatedThere Are Three Main Different Forms Of Business Organisations:.1410 Words   |  6 Pagesmain different forms of business organisations: †¢ Sole Trader †¢ Partnership †¢ Companies Sole Trader: A sole trader is an individual owner of a business. There is a risk vs reward system in place with sole trader as they reap all rewards in the form of revenue and profits but is also entirely liable for all the losses in the business. Characteristics of a sole trader: With regards to the characteristics of this business organisation, sole traders are accountable for the legal and financial elementsRead MoreHow A Successful Business Is Business1482 Words   |  6 Pagesfail to make the right assumption of the market conditions and also produce goods and services where there is less demand. Firms are distinguished by their form of ownership. There are three types of businesses; sole trader, partnership and limited companies (public and private). A sole trader is a fairly small business owned by one individual for example a corner shop, the firm’s owner retains all the profits it makes but these can be taxed as income. A partnership is a business divided by two or moreRead MoreJustification for Using a Corporate Business Structure1139 Words   |  5 Pagescorporate business structure In today s competitive business environment, your choice of corporate structure could affect your business long term success. A business entity can be structured in three ways, that being a sole trader, partnership or a company. Sole traders carry on business alone, thus leaving the owner with complete control of the enterprise and its employees, ownership of all profits, business assets and personal responsibility for all debts. It is the simplest business structureRead MoreThe Structure Of Business Organisations Essay1479 Words   |  6 PagesThose legal structures are: sole trader,partnership,partnership with limited liability(LLP),private limited company (LtD) and public limited company (PLC). This project will explain in detail the structure of those organisations,list the documents required to set up every single one of them and will also mention about financial accounts needed to inform stakeholders about the business activities. 1) SOLE TRADER A man who has started workingRead MoreChoosing the Business Structures for Our Business962 Words   |  4 PagesThe main 4, which we discussed and looked at, were sole traders, business partnerships, private limited companies, and public limited companies. Looking at our company we consisted of 9 people who were actually running and would own the company, so the option of being a sole trader wasn’t obtainable for us, as in a partnership it would have meant that there could be one owner who is running the actual company, so this didn’t not suit our company as we were 9 people so we had to take this option awayRead MoreMy Chosen Bussiness Legal Structure1132 Words   |  4 PagesSOLETRADER ‘‘A sole trader is a company started and run by one individual. ‘’ [http://www.e-conomic.co.uk/accountingsystem/glossary/sole-trader] People who want to run and operate a business ,want to have a total control, prefer to work on their own or employ often just one or two employees, make all the decisions by themselves and do not want to invest much money into the business are inclined to work as a Sole trader. This business is known as a ‘one-man business‘ and must be registered for VATRead MoreInvestigation of the Types of Business Ownership Essay801 Words   |  4 PagesInvestigation of the Types of Business Ownership JCC Limited is a private limited company. Other forms of business ownership include: The sole trader. This is the most common form of private sector business. This type of business has one owner who runs the business and may employ any number of people to help. Advantages of being a sole trader include the lack of legal restrictions, the sole trader is able to set up their business relatively quickly. Also all profits Read MoreLegal Structure of a Business Orgnanisation Essay1358 Words   |  6 Pagesdistinction is that some businesses provide limited liability for any debts the business incurs. Others have unlimited liability - which obviously doesnt [IMAGE]Unincorporated Incorporated Up Arrow Callout: Sole-trader Up Arrow Callout: Partnership Up Arrow Callout: Private Limited Company (ltd) Up Arrow Callout: Public Limited Company (plc) What is a Sole-trader? (Builder/local shops/hairdresser) Sole-traders are individuals who own and operate theirRead MoreDifferent Types Of Business Structure Of A Start-Up Company1120 Words   |  5 PagesThe type of business structure that the start-up company will decide to use will depend on a number of unique factors. This section of the document will highlight the various options available in terms of business structure and highlight the advantages and disadvantages of each one. Sole Trader This is one of the simplest ways of starting up a business. The term sole trader basically means â€Å"self-employed†. Therefore the business is owned and managed by one individual. There is an emphasis to informRead MoreAn Organization Is An Arrangement Of People, Pursuing Common Goals, And Standards Of Performance Essay1098 Words   |  5 Pagescategorized by legal structure. They are sole trader, partnershiop, private or public company, government, voluntary organisation, co-operative, charitable and not-for-profit organisations and franchise. Fashion Queen Elsa is a small business because it normally employs less than 200 people. It is a tertiary sector because it includes not only products but also services. As it is owned by one person and run by a few people, it is a sole trader. Sole Traders Sole traders are single individuals carrying on