Which statement best describes a sole trader?

A sole trader is defined as a business owned and operated by an individual without any legal distinction between the owner and the business itself. This structure allows the owner to have complete control over the operations and decision-making processes, as well as having the sole responsibility for any profits and debts incurred by the business. Being a sole trader is often chosen for its simplicity and ease of establishment, particularly for small businesses or individual entrepreneurs.

In contrast to other business structures, such as partnerships or corporations, a sole trader does not require a board of directors or formal registration with governmental bodies, although some local regulations may still apply. It is also important to note that a sole trader does not share ownership or responsibility with anyone else, which distinctly differentiates this form of business from partnerships or corporations that may involve multiple owners or shareholders.