{"id":108302,"date":"2024-11-20T08:31:54","date_gmt":"2024-11-19T21:31:54","guid":{"rendered":"https:\/\/timesnewsgroup.com.au\/ballarat\/?p=108302"},"modified":"2024-11-26T08:37:32","modified_gmt":"2024-11-25T21:37:32","slug":"sole-trader-or-small-business-exploring-the-benefits-differences","status":"publish","type":"post","link":"https:\/\/timesnewsgroup.com.au\/ballarat\/news\/sole-trader-or-small-business-exploring-the-benefits-differences\/","title":{"rendered":"Sole Trader Or Small Business? Exploring The Benefits & Differences"},"content":{"rendered":"

Are you considering whether you want to <\/span>operate as a sole trader<\/span><\/a>, or maybe start a small business? Perhaps you have a skill to sell, a craft to share, or a talent to profit from. Whether your niche is in landscaping or literature, it\u2019s important to understand the benefits and differences of both.<\/span><\/p>\n

In this article, we\u2019re doing just that. Once you\u2019re clued up on what it means to be a sole trader, and what it means to run a small business, you can decide which avenue you want to go down.<\/span><\/p>\n

Keep reading as we explore the benefits of both and the differences between the two.<\/span><\/p>\n

What is a sole trader?<\/strong><\/h2>\n

A sole trader is essentially someone who runs and operates an entire business. A sole trader is legally and independently responsible for all aspects, including debts and losses. It\u2019s a straightforward, quick way of starting your own service or selling your own products, especially if you\u2019re operating solo without tangible plans to expand. You can employ others, but you cannot employ yourself. Any sick or holiday leave as well as superannuation contributions will be made from your own pocket.<\/span><\/p>\n

What is a small business?<\/strong><\/h2>\n

In tax terms, a small business (or a company), is a \u2018<\/span>separate legal entity with its own tax and superannuation obligations\u2019<\/span><\/a>. It is run by directors and owned by shareholders, who might be the same or different people. A company can make profits that are distributed among its shareholders, directors and colleagues, although there are other financial obligations involved in running a small business that must be carried out, such as enforced tax and superannuation contributions and business activity and issue distribution statements.<\/span><\/p>\n

What\u2019s the main difference between a sole trader and a small business owner?<\/strong><\/h2>\n

The best way to separate out the two is to think of a small business existing as an independent entity, whereas a sole tradership is a formalised extension of one person\u2019s skill, knowledge or trade turned into a business operation.\u00a0<\/span><\/p>\n

Sole traders do not fill out a separate tax return for their operations and have slightly <\/span>different tax obligations<\/span><\/a>. Their business is an extension of their personal income. Meanwhile, small business owners share responsibilities, duties, liabilities and profits with others, making it a less personal venture.<\/span><\/p>\n

A sole trader has complete control over their entrepreneurial endeavours, although they are uniquely responsible for both the successes and <\/span>stresses of running an independent business<\/span><\/a>.<\/span><\/p>\n

What are the benefits of being a sole trader?<\/strong><\/h2>\n