Which term describes a self-employed person who runs the business on their own and has sole responsibility for its success or failure?

Which term describes a self-employed person who runs the business on their own and has sole responsibility for its success or failure?

• A. Sole Trader
• B. Limited Company
• C. Partnership
• D. Franchise

Answer: (A)

The idea here is ownership and liability in a small, single-person business. A sole trader is a self-employed person who owns and runs the business alone and carries all responsibility for its success or failure. They decide everything, keep any profits, and face unlimited liability, meaning their personal assets could be at risk if the business owes money. The other options don’t fit because a limited company is a separate legal entity owned by shareholders, with liability limited to the amount invested. A partnership involves two or more people sharing ownership and liability. A franchise is a licensed business model where someone operates under another brand’s system, which can involve one or more owners but is defined by the licensing relationship rather than by sole ownership and responsibility.

The idea here is ownership and liability in a small, single-person business. A sole trader is a self-employed person who owns and runs the business alone and carries all responsibility for its success or failure. They decide everything, keep any profits, and face unlimited liability, meaning their personal assets could be at risk if the business owes money.

The other options don’t fit because a limited company is a separate legal entity owned by shareholders, with liability limited to the amount invested. A partnership involves two or more people sharing ownership and liability. A franchise is a licensed business model where someone operates under another brand’s system, which can involve one or more owners but is defined by the licensing relationship rather than by sole ownership and responsibility.