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Word Count: 453
A sole trader operating under a franchise is said to be the master of all heshe controls Discuss this statement with special reference to the advantages and disadvantages of such a business structure in connection with the operation of a franchise Advantages A sole trading business organisation is the simplest form of business organisation as it only requires one principal Sole traders can be found in most types of business undertakings such as small professional practices builders plumbers delis etc The business organisation is in effect the individual who is responsible for setting up operating and leaving the sole tradership in any manner he or she please There is no law relating specifically to sole traders They are however subject to laws connected with fair trading local authority regulations if operating out of a residence tax etc The Business Name Act is important and has been dealt with in depth earlier in the Text Disadvantages That person is responsible for the entire decision making and is in sole control Funding can be difficult often by way of a mortgage over property and the sole trader is personally liable for all the debts of the business A sole trader is not regarded as a separate legal entity in the eyes of the law However in commercial circles the concept of the sole trader is well established and in terms of accounting conventions such business are treated as separate accounting entities as distinct from the proprietors The sole trader will have to be aware of numerous pieces of legislation governing tax trade practices health and safety workers compensation public liability insurance industrial law local authority by-laws environmental protection etc Any liability under such legislation will fall squarely on the shoulders of the sole trader There is no continuity of existence as this is tied to the length of time the sole trader wishes to trade or of course death
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