Which is a disadvantage of a sole trader related to business continuity?

Which is a disadvantage of a sole trader related to business continuity?

• A. The owner has complete control
• B. It is easy to set up
• C. Profit is shared with partners
• D. No continuity - the business may end if the owner stops trading

Answer: (D)

In a sole trader, the business life is closely tied to the owner. Because there isn’t a separate legal entity that can continue on its own, the business often ends if the owner stops trading or dies. There isn’t an automatic successor to carry on, unless the owner arranges to transfer or restructure the business (like forming a company or bringing in new owners). This makes continuity a real disadvantage when you think about the business lasting long term beyond the current owner. The other points describe typical advantages rather than continuity issues: having complete control is a benefit, easy to set up is a convenience, and profit sharing with partners doesn’t apply to a sole trader since there aren’t partners in the business.

In a sole trader, the business life is closely tied to the owner. Because there isn’t a separate legal entity that can continue on its own, the business often ends if the owner stops trading or dies. There isn’t an automatic successor to carry on, unless the owner arranges to transfer or restructure the business (like forming a company or bringing in new owners). This makes continuity a real disadvantage when you think about the business lasting long term beyond the current owner.

The other points describe typical advantages rather than continuity issues: having complete control is a benefit, easy to set up is a convenience, and profit sharing with partners doesn’t apply to a sole trader since there aren’t partners in the business.