Which description matches a Sole Trader?

Which description matches a Sole Trader?

• A. A business owned and operated by one person
• B. A business owned by two to twenty people
• C. A business that invites 2-50 private shareholders
• D. A business that offers shares to the public

Answer: (A)

A sole trader is a business owned and operated by one person. This setup means one individual makes all the decisions and keeps all the profits, but also bears all the risks and debts personally. It’s the simplest form of business ownership, with minimal setup and no legal distinction between the owner and the business. The other descriptions refer to different structures: a partnership involves two or more people sharing ownership, a private company has private shareholders (typically a few individuals), and a public company invites shares from the general public.

A sole trader is a business owned and operated by one person. This setup means one individual makes all the decisions and keeps all the profits, but also bears all the risks and debts personally. It’s the simplest form of business ownership, with minimal setup and no legal distinction between the owner and the business.

The other descriptions refer to different structures: a partnership involves two or more people sharing ownership, a private company has private shareholders (typically a few individuals), and a public company invites shares from the general public.