What Does Sole Trader Mean?

A sole trader is a person who prefers to do business on his own without affiliation to a company or partners. A sole trader will bear full responsibility of any profits or losses the business may incur.

A sole trader may also be called a sole proprietor. The sole proprietor of any professional practice is called a sole practitioner. A sole trader's accounts refer to the accounts and financial statements of an enterprise that are borne by a single individual.

A sole proprietorship is a business enterprise that has no separate legal existence apart from its owner. Accordingly the limitations of liability that limited liability partnerships and corporations enjoy do not apply to these sole proprietorships. In spite of this, these ventures have many plus points, for one; there are no managerial disputes as the proprietor has total control. Another obvious advantage is that these ventures are extremely conducive to quick decision making and many cumbersome legal formalities can conveniently avoided.

Sole trader is the person who run the business own and operated for its own profit or we can say that he owns and risk all and gain all.  
The sole proprietor owns the business individually. It business usually small in size so it manages by the owner. He may have some paid workers to assist him but ultimate controls rests in his hand. He provides necessary capital for run the business. He may borrow this capital from resources such as friend or bank if it needs. The trader himself bears all risks. No body else has any stake in business. The sole trader is personally liable for debts of the business. The creditor can lay claim not only on his business assets but also his personal property such as car, house, furniture etc to recover the loan. In the eyes of law3, the sole trader and his business are considered as one. In other words we can say that the sole trader and business all assets and liabilities are same. The sole trader runs its business individually so generally their relationships with customer are strong and all customer known him personally. Sole trader's represents about more then 70% of all business.

A sole trader or sole proprietorship is a business entity which does not have any separate existence from its owner. In sole trade the owner of the business is responsible for the complete profits and risks of the business therefore, like corporations, he cannot enjoy the limitations of liability. All debts of the business are the debts of the sole trader and same is the case with the revenues. Sole traders are very common but these are usually small businesses and only one person does business in his/her own name.