Sole Traders and Partnerships

This lesson examines the simplest forms of business ownership — sole traders and partnerships. You need to understand their features, advantages, disadvantages, and the crucial concept of unlimited liability. This is part of AQA topic 3.1.2: Understanding different business forms.

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Sole Traders

Key Definition: A sole trader is a business owned and operated by one person. The owner has complete control over the business and receives all the profits, but also bears all the risks.

A sole trader is the simplest and most common form of business in the UK. There are approximately 3.5 million sole traders in the UK, making up the majority of all businesses. Despite their numbers, they account for a relatively small share of total business revenue because they tend to be small.

Features of a Sole Trader