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1. Briefly explain two possible disadvantages to a sole trader of changing to a

Private limited company.

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Answer:

Sole trader has independence of decision making and unlimited liability for debts which is not the case with Private limited company

Step-by-step explanation:

Two possible disadvantages to a sole trader of changing to a Private limited company are as follows -

a) As a sole trader there is unlimited liability for debts while in case of private limited company the the transfer ability of shares gets restricted.

b) The sole trader is the sole decision taken while in case of private limited company the joint decision can be taken by the co owners.

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