Which type of private sector business is typically small and owned by one person?

A sole trader is a type of private sector business that is typically small and owned by one person. This structure allows the individual to have complete control over the business operations, making all decisions independently. Sole traders benefit from simplicity in terms of setup and management, as they do not need to adhere to complex regulations that larger business entities might face.

Furthermore, the owner receives all profits from the business but also bears unlimited liability, meaning their personal assets are at risk if the business incurs debts or legal issues. This direct relationship between ownership and management often leads to a more personalized service and closer customer relationships.

In contrast, a limited company involves shared ownership and limited liability, making it a distinct structure with more regulations. A joint venture entails collaboration between two or more businesses for a specific project, lacking the singular ownership characteristic of a sole trader. A franchise operates under a licensed brand and includes elements from both ownership and company structures, typically involving multiple units operated by different owners under the same brand guidelines. Each of these options features different ownership models and levels of complexity compared to a sole trader.