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

[Sir Afzal Shad]

21 Outline a difference between a sole trader and a private limited company. [3]
Hint: Liability > Sole trader has unlimited, Ltd has limited.
Hint: Legal status > Ltd is a separate legal entity, sole trader is not.

[Aarib Saad]

(KN)A sole trader business is owned and controlled by only one person, where as a private limited company has multiple owners (shareholders).
(APP)For instance, in the case of two restaurants, one of which is a sole trader and the other a Private Ltd. company, the sole trader can just decide himself what new dish to launch, where as in a private ltd. the input of all shareholders will need to be taken.
(AN)Thus quicker decision making for sole trader as compare to private ltd., so market opportunities can be captured on time by sole trader, leading to comparatively higher market share.

[EmmanWaseem]

In the sole trader, the business ends when the owner dies or quits, so it doesn't continue
In Ltd the business will continue even if the shareholders change

[Shaliza khawaja]

sole traders have unlimited liability whereas private limited company has limited liability For example if a sole trader is running a bakery and is unable to pay a loan bank can take ther personal asset but if a private limited company cannot pay back a loan, shareholder will only lose the money they invested . This means a sole trader takes more financial risk then compared to a private companies shareholder. people feel more secure investing in private companies, making it more attractive to investors whereas for a sole trader a person feel more hesitant as they have to bare the lose and responsibilities on its own.

[Abdullah Altaf]

[KN] Sole trader is owned and controlled by the one person whereas private limited companies has many owners(investors).
[APP] For instance if a business wants to buy advanced machinery sole trader will find it difficult to raise finance, as funding is typically limited to personal savings whereas private limited will find it easier to raise capital as the company can issue shares to attract investors.
[AN] Hence private limited companies can easily expand which improves popularity as more people will know hence reducing costs of advertisements.

[hassanalizafar]

[KN] A sole trader has unlimited liability while a private limited company has limited liability.
[APP] For instance, if a sole trader running a bakery gets into debt they have to sell there personal assets like their car to pay it off but in a private limited company only the money invested in shares are at risk.
[AN] This protects the personal wealth of Ltd owners which reduces their financial risk encouraging them to take bigger business decisions that can lead to more innovation and growth making the business more attractive to investors hence supporting long-term expansion.

[Abdul Hadi]

KN: A sole trader has unlimited liabilities, meaning the owner is personally responsible for any debts of the business while a private limited company has limited liabilities.
APP: For exampe if a sole trader's business fails the owner might have to sell personal assets to repay debts whereas in a private limited company only the ammount invested by the owner will be lost.
AN: This means soletrading is riskier for entrepreneurs as compared to private limited companies, encourages more investment for private limited companies as there is less risk, however soletraders can be quickly setuped as compared to private limited companies as more legalities have to be fulfilled for private limited companies.

[shamaim shakeel]

KN: A sole trader has unlimited liability, while a private limited company (Ltd) has limited liability.
APP: For example, if a sole trader’s shop goes into debt, they may have to sell personal belongings, but in an Ltd, only the business assets are at risk.
AN: This makes a private limited company less risky for owners, encouraging investment, while a sole trader carries more personal financial risk.

[Muaz Aamir]

KN: A difference between a sole trader and a private limited company is how much liability the owners have.

AP: For example, a sole trader has unlimited liability, while a private limited company gives its owners limited liability.

AN: This means a sole trader could lose personal belongings, like their house or car, if the business fails. In a private limited company, the owners only lose the money they invested. This makes it safer for people to take risks in a private limited company.

[tanzeelrehman]

{KN] = Sole trader is the single owner of business, whereas private limited company has multiple owners ( shareholders)

[APP] = Sole trader can easily make the new decision for the business, whereas private limited company has to consult all his shareholders to take any decision

[AN] = This gives sole trader more control over the business. It helps sole trader to make faster decisions. Sole trader can adapt new market trends faster. Sole trader can keep all the business's sensitive information private.

[Abdur Rehman khan]

[KN] A sole trader has unlimited liability, while a private limited company has limited liability.
[APP] For example, if the business fails a sole trader may have to sell personal assets like their house, but in a Pvt. the shareholders only lose what they invested.
[AN] This protection encourages more people to invest in a private limited company as their personal wealth is safer which makes the business more financially secure.

[Arham Qadri]

[KN] Private limited company has limited liability while sole trader has unlimited liability.
[APP] For example if business of a sole trader fails, he might have to sell his personal asset so that he could repay the debt while if business of private limited company fails only the money invested in business would be lost not the personal asset.
[AN] Hence many people go for private limited company as their personal asset will be safe, and they will feel secured hence making it safer to take risks in private limited company.

[areeshasaber]

[kn] A sole trader is owned and ran by one person whereas a private limited company has multiple shareholders.
[app] For instance, a local bakery owned and ran by one person against McDonalds with shareholders.
[an+] a local bakery will have full control and keep all the profit, on the other hand McDonalds will have limited liability and more capital.

[Mamoona Hussain]

KN: A private limited company has limited liability whereas a sole trader business does not.
APP: For instance, Dyson (UK) has limited liability, therefore the personal assets of the owners are not at stake whereas a business like (___), does not have that benefit.
AN: Due to limited liability, a private limited company attracts more investors, which they can later use to open up a new branch, which will help them to target more customers, increasing sales, therefore, revenue and profit margins too. However, this can be difficult for a sole trader business as it only has one person's investments which can be lesser than a private limited company's at times.

[abdurrehman waseem]

KN: Sole trader is the single owner of business, whereas private limited company has multiple owners.

APP: Sole trader can easily make the new decision for the business, whereas private limited company has to decide with all his shareholders to take any decision

AN: This gives sole trader more control over the business. It helps sole trader to make faster decisions. Sole trader can adapt new market trends faster. Sole trader can keep all the business's sensitive information private.
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