Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 8 - No. 38)
What is the main difference between a sole trader and a limited company?
Sole traders have unlimited liability, limited companies have limited liability.
Sole traders are easier to set up, limited companies are harder.
Sole traders pay more taxes.
Limited companies have more employees.
Explanation
The key difference is the liability structure. Sole traders have unlimited liability, while limited companies offer limited liability.
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