SOLE TRADER (Form of ownership)

(REM): Which one of the following options define a sole trader?

• Someone who is knowledgeable about legal matters.

• An individual who owns an enterprise.

• Someone who pays tax.

• An individual who is a member of a company.

(UND): Which one of the following options is not an example of a sole trader?

• Hairdresser

• Spaza Shop

• Tailors'

• JSE

(ANA): Which of the following is a characteristic of a sole trader?

• Owned and managed by one person.

• Established by two individuals.

• Owned by a maximum of 10 members.

• Has continuity.

(ANA): Which of the following is not an advantage of a sole trader?

• Owner can make quick decisions.

• All profits belong to the owner.

• No formal documents are needed.

• Capital is limited to what the owner can supply.

(REM): How many owners can own a sole proprietorship?

• Maximum of 10.

• 2

• 1

• Unlimited.

Aron Ntunge opened The Sweet Tooth in November 2012 at Ceres. The shop has a friendly atmosphere with superior service and high quality products. Aron gave up his job as a Marketing Director to be closer and more available to his business. He is continuously developing new products.

(ANA): Aron is a sole trader. Which of the following characteristics are advantages of a sole trader?

• Owner gets all-round experience in managing a business.

• No formal documents are required.

• Owner is a able to pay high salaries.

• Capital is not limited to what the owner can supply.

• A and B.

(EVA): A sole trade is taxed only once a year.

• True

• False

(APP): When the owner of a sole trader dies what happens to the business?

• It continues.

• It discontinues.

• It continues if the owner has a spouse.

• The employees take over.

(APP): An individual who is responsible for all the debts of a sole trader.

• Shareholder

• Wealthy employee

• Partner

• Owner

(APP): An enterprise that has unlimited liability

• Closed corporation

• Sole trader

• Private company

• State owned company