What is a Sole Trader?

A sole trader is a simple business structure in which one individual operates and owns the business. 

The sole trader business is typically small. Gardeners, plumbers and electricians often operate as sole traders. Sole traders rely on their own savings and bank loans to finance their business. 

A sole trader is entitled to keep all profits after taxes have been deducted but is also liable for all losses the business incurs. 

Within the sole trader arrangement, one person is legally responsible for all aspects of their business and are personally liable for their business finances. This is known as unlimited liability.