What does being a sole trader imply about a business?

Being a sole trader means that the business is owned and managed by one individual. This structure allows the owner to have full control over all aspects of the business, including decision-making, management, and profit distribution. Sole traders are often responsible for all debts and liabilities of the business, which means they must be prepared to handle financial risks on their own.

This setup typically involves a simpler and more informal structure compared to partnerships or corporations, which require multiple owners or shareholders. A sole trader often operates on a smaller scale, dealing with clients directly and managing the business's daily operations single-handedly. Thus, the identification of a sole trader highlights the unique position of having a single owner who plays an integral role in the functioning of the business.