What is a Sole Trader and what is a Partnership?

A Sole Trader is a person who sets up and owns their own business. They may work by themselves as a Freelancer or they may decide to employ other people but they are the only owner.

A Sole Trader has unlimited liability because they are the business - there is no separate entity (like with a Limited Company or Limited Liability Partnership (LLP).

 

A standard Partnership is similar to a Sole Trader other than that there is more than one person running the business. Most of the content in this section applies equally to Partnerships as it does to Sole Traders.