Alex is a sole trader who works alone, maintaining and repairing photocopier systems.
He works about 80 hours per week, 52 weeks per year with no holidays.
He wants to take on a major new maintenance and repair contract for a local hospital’s administration department that needs to print out patient records on special paper.
This will require at least 60 working hours each week to do it justice.
It will be extremely profitable if he can acquire the necessary equipment to do the work.
Which of the following statements about his sole trader status is true?
Select ONE answer:
- It prevents him from employing staff to help with the contract
- It gives him personal liability for any failure of his in relation to the hospital photocopier system
- It prevents him from obtaining a loan to obtain the equipment
- It allows him to issue shares in his business to friends and family
Show your workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 2
- Notcorrect
- Correct –> As a sole trader he does have the disadvantage of personal liability.
- Not correct
- Not correct
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