Which of the following statements about a sole trader is NOT true?
A)Anyone capable of entering into a contract can operate a business as a sole trader.
B)A sole trader may have difficulty in raising business capital.
C)Sole traders have unlimited liability for the debts of the business.
D)The business of a sole trader can sue and be sued in its own name.

Question

Quizplus · Accepted Answer

Sole traders operate their businesses as individuals, not as separate legal entities. Therefore, any legal action taken by or against the business is actually taken by or against the individual owner, not the business itself.

Which of the Following Statements About a Sole Trader Is