Which term describes someone who owns and runs a business, where in law the sole trader and the business are the same?

Which term describes someone who owns and runs a business, where in law the sole trader and the business are the same?

• A. A limited company
• B. A sole trader
• C. A partnership
• D. A franchise

Answer: (B)

The key idea here is the legal identity of the owner and the business. When the owner and the business are the same in law, there’s no separate legal entity; the person operates the business as an individual. That describes a sole trader. The owner runs the business directly, keeps all profits, and is personally responsible for its debts (unlimited liability). This differs from a limited company, which is a separate legal entity; from a partnership, which involves more than one owner; and from a franchise, which is a business model that can be operated under different legal structures but does not by itself define sole ownership.

The key idea here is the legal identity of the owner and the business. When the owner and the business are the same in law, there’s no separate legal entity; the person operates the business as an individual. That describes a sole trader. The owner runs the business directly, keeps all profits, and is personally responsible for its debts (unlimited liability). This differs from a limited company, which is a separate legal entity; from a partnership, which involves more than one owner; and from a franchise, which is a business model that can be operated under different legal structures but does not by itself define sole ownership.