Sole Traders

A sole trader is a person conducting a business alone, without the use of a company structure or partners, who bears alone the full responsibility for the activities of the business. The sole trader is personally liable for all debts of the business, should the business fail. The business can operate under a trading name that can be quite different from the name of the sole trader. However, the sole trader's name should appear on all business stationery to enable the public at large to see that the business is being operated by a sole trader. Failure to do so might arguably constitute misleading or deceptive conduct in trade for the purposes of the Fair Trading Act 1986.

If you are operating as a sole trader you will be taxed on your income from the business at your individual tax rate. You should seek advice from your accountant as to whether or not a different business structure will assist with growth of the business and minimisation of tax. Talk to Rennie Cox to obtain a recommendation for a reliable accountant, and to receive advice on the legal implications of each form of business structure.