Martn Albuja Business

Assessed Activity (Report)

Sole Trader can be defined as a person that runs a company by themselves, with no other people as shareholders. If a sole trader, such as David Merchant, wants to convert into a private limited company, they would have to take some things into account in order to continue operating well. To start, a private limited company is a company run by two or more people, which have low liability because if you fail in the maintenance of the company, you only lose your shares, so the company wills still working with the other shareholders. If you want to convert from a sole trader to a private limited company, first of all you have to add more shareholders into the company. If you continue being just one person that is running the company, the liability will continue being exactly the same, due to the fact that the shares will be with only person. Adding one more person at least to the company, will reduce the liability because if the company starts to fail, you only lose your shares and not all of the companys, and your partner or partners will continue running the place. If David Merchant was thinking about remaining as a sole trader, he has to think a lot about how he is managing his company in order to have a good profit and remain having good reputation in the market. One thing that you have to keep in mind if remaining a sole trader is that you can be the only person taking the decisions for your company, and you will not have to argue with another partner to make decisions about the present and future of the company. In conclusion, I think that it would be a good idea for David Merchant to become a private limited company because now he can have a lot less liability and be sure that he will be not losing all of the companys money, and continue operating well. Also, now having partners, they can talk and take decision for the company, because two brains think better than one.