A sole trader is a type of business owned and operated by one individual, making it the simplest form of business structure. It is a popular choice for small business owners, such as freelancers, tradespeople, and independent retailers. The owner has full control over the business decisions and is entitled to all profits, but they also have unlimited liability. This means they are personally responsible for any debts the business incurs.
This structure requires minimal paperwork and is easy to set up, making it an attractive option for those starting a new venture. However, it also means that personal assets are at risk if the business does not perform well. Understanding the responsibilities and risks associated with being a sole trader is crucial for students studying GCSE Business.
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