What is a sole trader?

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Study for the VetSkill Level 3 Diploma VN01. Enhance your understanding with flashcards and multiple-choice questions. Each question includes hints and explanations. Prepare confidently for your veterinary nursing responsibilities exam!

Multiple Choice

What is a sole trader?

Explanation:
A sole trader is a business that is owned and run by one person. This person has full control of the business, keeps all profits, and is personally responsible for any losses or debts. It’s the simplest structure—no separate legal entity like a company is created, and there’s just one owner making the decisions. This differs from ownership by a corporation (where a company is the owner and the owners are shareholders) and from partnerships or franchises (both of which involve more than one owner or distinct brand/licensing arrangements). So the description “owned and run by one person” is the best fit for a sole trader.

A sole trader is a business that is owned and run by one person. This person has full control of the business, keeps all profits, and is personally responsible for any losses or debts. It’s the simplest structure—no separate legal entity like a company is created, and there’s just one owner making the decisions.

This differs from ownership by a corporation (where a company is the owner and the owners are shareholders) and from partnerships or franchises (both of which involve more than one owner or distinct brand/licensing arrangements). So the description “owned and run by one person” is the best fit for a sole trader.

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