Many small retail and service businesses are sole traders or partnerships owned and operated in the names of individuals involved.
Some of the advantages are:
- Simple and cost effective to establish
- Simple and inexpensive accounting requirements
- Can be easier to change ownership
- Simplified tax arrangements.
- personal assets exposed to business and financial risks
- reduced scope for effective tax planning
- fewer options for business succession planning
- limited ability for growth (such as franchise, multiple locations)
- dispute resolution among owners can be expensive and difficult
While sole trading and partnerships are simple and relatively low cost structures to establish, they are not necessarily the best choice of entity for a business. Generally, they are not suited to larger trading enterprises.
To operate as a sole trader or partnership under a name other than your personal name, you will need to register a business name. Registering a business name does not give you ownership of that name, however to protect your rights in a business name, you should register a trade mark.
Teece Hodgson & Ward helps sole traders and partnerships to protect themselves and create the right legal framework and platform for success.
We can provide you with expert information and reliable advice about Business and Property Law matters.