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Report: There is a huge change from being a sole trader all the way up to becoming a private limited company.

There are many ups and downs involved. Being a sole trader involves a company being managed and owned by one person, and the oneperson controls absolutely everything. In a private limited company there is usually o board of directors/owners, which manage the company/firm. Both have their risks that should definitely be taking in deep consideration. For a sole trader there is high liability, this means that if the company goes down so does the owner. It is a huge risk since you could loose everything. However a sole trader isnt as big as a private limited company, so the company is basically really small compared to other firms under a private limited company regime. By having a small company there are less problems and requirements to take in mind and it is much easier to run the business. Also the profit goes directly to you since you are the only owner. For a private limited company there isnt a high liability, in any case of a loss the owner only looses the amount of money invested. The risks are much shorter and the profit depends on the greatness of the firm. If the firm is a good widely known firm with a large profit income then there will definitely be a profit for your pocket. However if it is a small firm profits wont be as high as being a sole trader. Overall, It really depends on the person, if the person is willing to take decisions with others rather than only by himself, to receive an average income and to take less risks, then a private limited company is the best option. However if the person is confident and strives to run a firm by himself knowing that there are many risk, bankruptcy possibilities and a great income then sole trader is the best option.