When you need to set up as a sole trader you need to set up as a sole trader if any of the following apply. This section partly replaces section 1 of the business names act 1985. A sole proprietorship is a business owned and managed by a single individual. Sole proprietorships have several advantages over other business entities. The business is set up under your name and you are entitled to keep all of the profit, but are responsible for the tax owed along with the debts incurred by the business. Simply put, anyone who engages in a trade, profession or other business on their own account, without. All companies incorporated under the companies act 1931 are designated as either public companies or private companies. If you operate your business as a sole trader, you are the only owner and you control and manage the business. Sole proprietorship in south africa immigration south africa. A sole proprietorship can have multiple people operating the business, but it must have one sole owner. A company is a corporation an artificial person created by law.
A sole trader is the simplest business structure and consists of an individual trading. The sole proprietorship is the simplest and most common form of business conducted by a single individual owner the sole proprietor. If he disappears from the scene due to death or some other reason, then the business will also be dissolved. Sole proprietorship can conduct business under their own name by simply doing business. Companies and partnerships compared a a company can be created only by certain prescribed methods most. The most basic form of business is the sole trader. Debts and losses cant be shared with other individuals. If the business makes a profit, this profit less tax belongs to the sole trader and. A sole trader wanting to enter this business will certainly be expected to comply with this law.
As a sole trader you will be legally responsible for all aspects of the business. A sole trader can employ other people in their business, but generally speaking, sole trader businesses are small in scale, with low turnovers, and few if any employees. It is the most common and simplest type of business entity. Youll generally make all the decisions about starting and running your business and you can employ people. You are legally responsible for all aspects of the business. On incorporation under the companies act 2006, a company is required to have.
The transfer of assets or business activities of a sole proprietorship registered in the trade register is governed by the provisions of the merger act. A company thus has legal rights and obligations in the same way that a natural person does. Sole trader partnership and limited company law teacher. A sole trader is the simplest form of business structure and is relatively easy and inexpensive to set up. Companies act legislation can be costly and time consuming. A business can be conducted through the following ways. The sole trader is his or her own boss and no other parties will be involved. Choice of organizational form for the startup business.
A sole trader is one person carrying on a business on their own, with complete control over its operations. There is no separate legal entity for the business. The corporations act sets out how a company is to make decisions. Sole trader partnership and limited company lawteacher. A sole trader is defined by the fact that one person is solely responsible for the business. A sole proprietor can also do business under a trade name such as janes jet skis or. Most of a companys decisions are to be made by the. The substantive law of contracts, torts, and agency govern the sole proprietorship, including the personal liability of the owner for the obligations of the business. It is the simplest and cheapest business structure.