Sole trader is the simplest form of company which is used to describe a person working for his/ her interest without having been any formal procedure to be incorporated as limited or unlimited company. The operation can be easily set up and commence immediately. The owner of a sole trader business has full control over the company where the owner can decide the way in which the business can be conducted. The sole trader owner has the authority to restructure and dissolve the company whenever it suits.
™
This is a type of business which contains greater and personal risk rather than a limited liability company. As a sole trader the owner of the company is responsible for all the aspect of the business. For a sole trade company it is not so easy to attract outside investors or partners which holds back the growth of the business. In terms of size the business is pretty small, but the number of sole trader business is very large in comparison to any other form of business
A sole trader business can be set up easily. No formal procedure is required to start the operation, which can often commence instantly. To set up a sole trade business it is not required to submit accounts or records in companies' house.
A sole trading differs from a limited company as follows:
If you are a sole trader then according to the law you are the person working on your behalf or an individual working on your own and working for others as a single person or individual. But in case of a limited liability company it is expected by the law that there is another person who is working along with you in the scope and power of a director of the company.
As a sole trade business you have to keep records of your business and submit your account details, but in case of a limited company it is expected to appoint an accountant and submit the yearly or bi-annual accounts by providing all information about their financial affairs. If a limited Liability Company falls in to bankruptcy or liquidation then it is the company to face not the individuals running the business. But in case of a sole trader company's bankruptcy or liquidation the owner will be held responsible for any difficulties or any unpaid difficulties.
Advantages of a sole trade business:
Easy to set up: The sole trader business is the simplest form business. You can set up your sole trade business easily. You can trade as you are looking for. No formal procedures are required and the business can be commenced immediately
Full control over your business: As a sole trader you have full control over your business and you can take any decision as per your suitability without consulting and taking permission from other partners
Easy to change: A sole trader business can be converted to limited company easily
Easy accounting maintenance: As a sole trader you can keep all the records of your financial affairs
Personal services: To attract your customers you can provide them personal service
Disadvantages of a sole trade business:
1) Business with greatest personal risk
2) Difficult to attract outsiders
3) You may find difficult to attract outside investments
Delaware is one of the most common states for forming an LLC to run a business. This is primarily driven by the history of Delaware for legal entity governance. The Delaware corporation is the gold standard when it comes to operating a larger venture that intends on going public. Not only does Delaware have arguably the most intelligent, responsive and efficient secretary of state in the country, but they have a legal court that is dedicated to handling business entity governance matters.
Privacy Is Paramount
Just as with corporations, Delaware continues to be a state that protects the most private information when it comes to a limited liability company. It requires only minimal basic information to be disclosed on the public records.
Experienced and Business Friendly State Agency
The Delaware Division of Corporations is one of the most well organized and efficient state agencies. They have a team of trained specialists who know everything about legal entity formations and incorporations. They pride themselves in offering the most business and consumer friendly help available and they offer many more options when it comes to filings than any other state. Delaware is one of the few states that will accept filings via facsimile which can speed up the process of Delaware LLC formation tremendously.
Delaware Registered Agents
Just as with other states, Delaware does require that a Delaware limited liability company have an officially appointed and qualified registered agent and registered office in the state. Because Delaware has been the number one state for incorporations and corporations have the same requirements, there is a network of qualified registered agent companies in Delaware that offer top rate service at extremely affordable rates.
Delaware Certificate of Formation
In order to form a Delaware LLC, an official document called the Certificate of Formation must be filed with the State.
As required by Delaware LLC Law Section 18-201, it must include the name of the company, the name and address of the registered agent, and can include any other matters that a company chooses to include. Many business will include indemnification and limitation of liability provisions just to ensure that their owners and managers receive the utmost protection available.
More Elaborate Limited Liability Company Law
Because this State has so much experience in governance matters and has probably dealt with almost any legal entity issue you can imagine (through its corporations laws), Delaware passed The Delaware Limited Liability Company Act which has more in depth provisions regarding the management and ownership of an LLC. This statute includes guidance for not only the major matters (such as formation, members, managers, and dissolution) but other topics such as finance, distributions, member and manager resignation, series LLC 開公司地址 matters, conversions and derivative actions.
Of course, Delaware honors the one of the biggest benefits of limited liability company entities - that of flexibility. It allows an LLC a lot of flexibility when it comes to setting up a management, ownership and operational structure that makes the most sense for each specific business.
SUMMARY
When it comes to the limited liability company, the great majority of them are formed in the home state of where the business will be primarily conducted. However, in some situations, it makes more sense to form the legal entity in a state which has favorable and proven LLC laws that will support the business as it grows and evolves. The State of Delaware has proven to be the best state for such situations because of its established laws, strong and fast courts, the formidable Delaware Secretary of State, and the strong network of services that have supported Delaware legal entity matters for over a century.