It's quite distressing how many lay people misunderstand the term sole trader.
A "definition" given here (and other definitions offered over the internet are no better) lends itself to confusion in many people's minds:
A sole trader is the simplest form of business in Ireland. As the name implies, it refers to one individual who owns and operates a business. A sole trader can have employees to assist with the running of the business, but it is the sole trader who owns the business, taking all the risks and rewards.
Since the new Companies' Act enables an individual to form a limited company and be its sole director and shareholder, people could be excused from concluding that any business that operates as a one-man band might be described as a sole tradership. But of course there is a world of difference both legally and financially between a sole trader and a single director limited company.
Just this week at a PAC Hearing, notables applied the term "sole trader" to the contractor structure advised to high-earning individuals at RTE.
Now it may well be that some of the latter would adopt a sole tradership for efficiencies in regard to property investment and one or two other things. But the reality is that most HEIs in RTE seem to be using a limited company structure to provide their services.
My proffered definition would be something like:
A sole trader is a person whose business profits are taxed on a personal income rather than on a partnership or corporate basis and who is solely and entirely liable for all the debts of that business.
Improvements to this definition welcome.
A "definition" given here (and other definitions offered over the internet are no better) lends itself to confusion in many people's minds:
A sole trader is the simplest form of business in Ireland. As the name implies, it refers to one individual who owns and operates a business. A sole trader can have employees to assist with the running of the business, but it is the sole trader who owns the business, taking all the risks and rewards.
Since the new Companies' Act enables an individual to form a limited company and be its sole director and shareholder, people could be excused from concluding that any business that operates as a one-man band might be described as a sole tradership. But of course there is a world of difference both legally and financially between a sole trader and a single director limited company.
Just this week at a PAC Hearing, notables applied the term "sole trader" to the contractor structure advised to high-earning individuals at RTE.
Now it may well be that some of the latter would adopt a sole tradership for efficiencies in regard to property investment and one or two other things. But the reality is that most HEIs in RTE seem to be using a limited company structure to provide their services.
My proffered definition would be something like:
A sole trader is a person whose business profits are taxed on a personal income rather than on a partnership or corporate basis and who is solely and entirely liable for all the debts of that business.
Improvements to this definition welcome.