Sole Trader in Relation to Partnership – Advantages And Disadvantages

Advantage of a sole trader in relation to partnership.

The exercise of full control is highly achieved in sole proprietorship as the sole trader undertakes every the entire control of the business. The sole trader runs the business how he/ she pleases with no interference from anyone (Naidu, 2012). Unlike a partnership in which one must consult with other partners before undertaking any role with respect to running the business.

There is quick decision making platform as the trader need not to confer with other decision makers, thus a swift move to meet the needs of his customers. On the other hand, the process of decision making in a partnership is long and involving which would results to delays in meeting customers’ needs (Dransfield, 2013).

Disadvantage of a sole trader in relation to partnership.

On the liability aspect, sole traders are disadvantaged as they are not treated as separate entity by law. They are subjected to unlimited liability (Bendrey, Hussey, West, Hussey & Bendrey, 2012). That is, the business owner takes liability with his personal assets when the business gets into debt, whereas in a partnership the any liability rests on the business assets and not personal assets of the partners.

Limited source of finance. A sole trader has to raise the funds for his business personally unlike in a partnership in which the task of funding the business rests on all the partners.


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