Day: July 17, 2020

Lucy was fed up with taking orders from other people at work. She wanted personal satisfaction and financial security so decided to set up as a sole trader selling indoor plants using modern gardening techniques.

After a successful 24 months trading on the internet from home she wanted to expand the business.

Lucy needed to raise £35 000 to buy a nursery and buy gardening equipment.

Which ONE of the following is the MOST LIKELY reason why Lucy decided to set up as a sole trader?

Select ONE answer:

1. She would take all of the profits.
2. She will benefit from limited liability.
3. She could raise finance from selling shares.
4. It would involve greater risk.

Show the workings to arrive at your answer, and explain and justify your reasons: