What Is A Sole Trader

What Is A Sole Trader

 

Contents

  1. Sole Trader Definition
  2. Sole Trader Requirements
  3. Sole Trader Advantages
  4. Sole Trader Disadvantages
  5. Sole Trader Taxes
  6. Register As A Sole Trader

 

Sole Trader Definition

Sole (Only) Trader (Merchant selling goods & services). A Sole Trader is a type of business owned by a single person and where the business owner is personally responsible for all debts incurred by the business.

Sole Trader Businesses are best suited for self-employed professionals who do the work themselves. 
Examples of individuals who should register as sole traders are Plumbers, Electricians, Painters, Landscapers, and Carpenters.

You can change the Sole Trader business' name, owner, address, and even its type (for example, switch to a Limited Liability Company).
Sole traders must file any changes to the particulars of the business, e.g., change of name or address, within fourteen (14) days of the change.

 

Sole Trader Requirements

  • The business owner must be over 18
  • The proposed business owner must have a valid (non-expired) ID Card, Driver's License, OR Passport.
  • The business must have an address within Trinidad & Tobago
  • The Sole Trader must have a valid business name that meets the criteria outlined by the Registration of Business Names Act 82:85
  • After registering, the business must have its own Bank Account separate from the owner. Due to anti-money laundering compliance, a Bank will suspend a Personal account if the owner uses it to deposit revenue earned from the business.

 

Sole Trader Advantages

  • The owner has 100% control of the business and makes all the decisions.
  • Sole Trader businesses are easy to set up because there is less paperwork, making the registration process quicker.
  • Because the sole trader business and owner are the same, they share a BIR #. Therefore the business does NOT pay additional taxes like "Corporation Tax."

 

Sole Trader Disadvantages

  • A disadvantage of a sole trader is "UNlimited liability," which means that the business & owner are NOT separate entities. Therefore the owner must sell personal assets to pay off any unpaid business debts.
  • If the owner dies so too does the business.

 

Sole Trader Taxes

Sole Trader businesses do not incur any additional taxes like Corporation tax. However, you still need to pay your regular income tax on the money you earn, just like every other citizen.

If the Sole Trader's income exceeds 360,000 TTD per year, then the business owner must pay a Business levy in lieu of income tax.

 

Register As A Sole Trader

Use MyBiz to officially register and change Businesses at the Companies Registry of Trinidad and Tobago.

MyBiz does all the proper paperwork and advises you so that you do not get yourself into legal issues that result from non-compliance and improper registration documents.
The process is online and completely hassle-free for you and gives total peace of mind, avoiding all the running around.

Click Here To Register Your Sole Trader