21 Outline a difference between a sole trader and a private limited company.

[Naveen fatima]

[KN] A difference is that a sole trader is owned and run by one person, while a private limited company is owned by shareholders.
[APP] For example, a sole trader like a small shop is controlled by just the owner, but a private limited company like a family business can have several family members as shareholders.
[AN] This means sole traders have full control but less money to raise, while private limited companies can bring in more capital but must share control with shareholders.

[Hajra]

[kn] a sole trader is owned and controlled by a single person whereas a private limited company is owned by shareholders.
[ap] For example a small shop run by one person is a sole trader but a clothing brand with shares owned by family members is a private limited company.
[an] This means a sole trader keeps all the profits but has unlimited liability while a private limited company shares profits but has limited liability.

[Abdullah Mohsin]

[KN] A sole trader has unlimited liability while the private limited company has limited liability.
[APP] Having unlimited liability means that the sole trader's personal assets will be sold off to pay any debts the business owes incase the business fales. However, the private limited company has limited liability which means the owner's assets will not be sold off to pay business debts.
[AN] This would encourage the private limited company to take more risks, leading to a greater reward e.g increasing profit.

[Fatima ibtehaj]

[KN]sole trader is the sole owner of the business and is personally liable for all debts whereas a private limited company is a separate legal entity from its owners (shareholders), meaning the owners have limited liability.
[APP]If someone chooses to be a sole trader, and one of his customers sues him for damage caused during a job, he could be personally forced to pay compensation and if someone sets up as a private limited company, any legal claims or debts would be against the company—not him personally.
[AN] A sole trader might be simpler and cheaper to set up in contrast, a private limited company offers more financial protection, which is especially useful in industries where legal claims or large debts are possible.

[Mahnoor satti]

[KN] Sole trader business is owned and controlled by only one person, where as a private limited company has multiple owners.
[APP] For instance, these are 2 businesses one of which is a sole trader and the other a Private Ltd. The sole trader can make all the decisions himself where as in a private ltd all the decisions had to go through every shareholders and than the final decision will be made.
[AN] Thus this shows that the decisions are made quicker in sole traderbusiness compare to private ltd. Which leads to quick action in production and fulfiling customer needs and wants leading to higher customer base and improved brand image.

[sarah_naeem]

[KN]: One main difference is that sole trader unlimited liability while private limited company has limited liability.
[APP]: For example, if a sole trader's business fails or goes into debt they might have to sell all their personal assets to payoff debts while a private limited company would only have to put the money invested in shares at risk.
[AN]: Thus, this means that sole trading is riskier as compared to private limited company and that private limited company are encouraged to further invest more and make their business better as their wealth is secured this leads to long-term survival of the business however, sole traders can quickly setup their business while private limited company has to have more legalities fulfilled.

[Amina Rizwan]

[KN] A private limited company has the benefit of limited liability whereas a sole trader has unlimited liability
[APP] For instance a sole trader that runs a bakery may be in high debt and they will have to sell there personal assets like their car in order to pay of there debt, on the other hand in a private limited company only the investment done in the business will be at risk.
[AN]this shows that it is easier for a private limited company to invest more into the business as they don't have the risk of losing their personal assets unlike a sole trader who will have to pay using personal asset thus this will encourage a private limited company to grow as more investment can be done hence improving sales of a private limited company

[M huzaifa jillani]

(KN)
A sole trader is owned and controlled by one person while a private limited company (Ltd) is owned by share holders.
(APP)
For example, a small grocery shop in rawalpindi might be run by one sole trader but a business like interwood furniture is a private limited company with several shareholders.
(AN)
This means a sole trader keeps all profits but has unlimited liability while an LTD shares profits but protects owners with limited liability.

[Ruqyia Salman]

[KN] A sole trader has unlimited liability, whereas a private limited company has limited liability.[APP] For example, if a sole trader’s bakery goes into debt, the owner may have to sell personal assets like their car to pay creditors, while in a private limited company, shareholders only lose the money they invested.[AN] This means private limited companies are less risky for owners, making them more attractive for entrepreneurs who want protection of personal wealth, whereas sole traders face higher personal financial risk.

[Areeba Arshad]

[KN] A sole trader is a business owned and operated by one person, whereas a private limited company (Ltd) is owned by shareholders.
[APP] For example, a local bakery run by one individual would be a sole trader, while a clothing brand owned by a few family members could be a private limited company.
[AN] A key difference is that a sole trader has unlimited liability, meaning the owner is personally responsible for all debts of the business. This could lead to personal assets being used to repay debts. In contrast, a private limited company has limited liabilty, meaing shareholders only lose the money they invested, which reduces personal financial risk.

[Uqbah hadeed kayani]

[kn] A key difference is that a sole trader has unlimited liability, while a private limited company has limited liability.
[app] For example, if a sole trader’s café goes into debt, they must repay it personally, but in a private limited company, only the business assets are at risk.
[an] This means a private limited company offers more financial protection, while a sole trader carries higher personal risk but faces fewer legal formalities.

[Haiderabbas]

KN: A sole trader is one person running the business, while a private limited company is a separate legal entity with shareholders.
APP for e.g... A street vendor selling fruits is a sole trader while an insurance company can be a private limited ocmpany.
AN: This highlights the legal protection Ltd status gives to personal assets. Ltds look more credible to lenders and investors which helps raise funds. However sole traders have simpler admin and keep all profits without corporate rules.

[Tuqwa]

(KN):A key difference between a sole trader and a private limited company lies in their liability and legal status.
(app):A sole trader has unlimited liability meaning the owner is personally responsible for all business debts. In contrast a private limited company has limited liability so shareholders only lose the amount they invested.
(an):This means a private limited company provides greater financial protection for its owners while a sole trader faces higher personal financial risk.

[Daris]

KN: A main difference between a sole trader and a private limited company is their liability.
APP: A sole trader has unlimited liability, meaning the owner is personally responsible for all business debts, while a private limited company has limited liability, so owners only lose the money they invested.
AN: This protection reduces personal financial risk, which encourages owners to invest more into the business. With greater investment, the company can expand and hire more staff. Over time, this makes the business more stable and competitive compared to a sole trader.