In 2002, Edward Delgardo completed his plumbing apprenticeship and became a qualified plumber. He then worked as an employee of a plumbing company for the next six years. Now he wants to start his own plumbing business. He already owns most of the equipment he will need and he has just bought a new flatbed truck. He also has $20,000 saved in his bank account which he can use as start-up capital.

Edward is married with two small children. He and his wife live in a house that Edward inherited from his deceased parents. The house is worth $300,000.

Further facts: Edward thinks that it might be a good idea to start his business in a small way, work on his own, and then slowly expand. Edward is anxious to avoid any unnecessary complexities and formalities and wants to keep start-up and running costs to a minimum.

With these points in mind, Edward is considering operating his business as a 'sole trader'.  Consider the questions on the following pages.