Sole trader: GCSE Business Definition

What is a sole trader?

In GCSE Business, a sole trader is a business with one owner who runs their own business alone. It's the simplest and most common type of business in the UK. The owner has complete control over their business decisions and keeps all the profits after tax, but they're also personally responsible for any losses or debts.

A sole trader is self-employed. They must keep records of the business's sales and expenses, and submit a tax return each year. Unlike bigger businesses, sole traders don't need to publish their accounts or share information about the business with the public.

Many people choose to become sole traders because it's simple and cheaper to start. For example, a local plumber or hairdresser might choose this structure to control all decisions and keep information private. However, it can be risky because the owner is personally responsible for business debts, and this unlimited liability makes it harder to raise funds for growth compared to other business types.

Sole Trader Revision Resources to Ace Your Exams

Save My Exams has a great range of resources to explore the topic of small business ownership further. 

Read our GCSE Business revision notes on sole traders, or test your knowledge of ownership, including sole traders, with our exam questions to improve your grades. 

Explore GCSE Business Revision Resources