A sole trader is one person in business on their own account, and the business is not registered as a company. If you operate as a sole trader, you retain the right to control and manage your business as you wish. You enjoy the profits of the business but are personally liable for all the debts incurred.
There are no legal formalities required to commence as a sole trader, although best practice indicates that you inform HM Revenue and Customs. As a sole trader, you may also be known as a proprietor or owner of the business.
Persons who carry on a business in common with a view to profit, without being incorporated, are usually engaged in partnership. Scottish partnerships are recognised as a separate legal entity, since the partnership can be distinguished (usually) from the individual partners.
Partnership creditors must look first of all to the partnership for payment. If the assets of the partnership are insufficient to meet its debts, the partners will be jointly and severally liable without limit.
Sole traders and partnerships are treated as individuals under Scots Law and therefore subject to the personal insolvency regime. Your financial solutions are the same as any other individual resident or trading in Scotland:
If you are trading as a partnership, you may qualify for Business Debt Arrangement Scheme
We will help you assess your situation, explore your options, provide you with advice and develop a solution for you. To arrange a free, no obligation consultation click here or call 01592 630085.