Scott is looking to start a new business selling organic food to try and target the current healthy food craze in Australia. He wants to call the business Organic. But he does not know what type of business structure to set up for Organic. Johnny is Scott's accountant and initially suggested to Scott that he sets up a sole trading or a proprietary company.

A. Briefly explain to Scott the nature of a sole trader and a proprietary company by providing the advantages and disadvantages of setting up one (5 marks).