Which statement best describes a sole trader?

A sole trader is defined as a business owned and operated by one person, who has full control over all aspects of the business. This structure simplifies operations, as the sole trader is responsible for making all decisions, retaining all profits, and facing all liabilities. The sole trader enjoys complete autonomy, which can lead to greater flexibility in management and operations, but also bears the full risk of any debts incurred by the business.

Other options reflect different business structures: joint ownership, board governance, and limited liability partnerships, which do not apply to a sole trader situation. This distinction underscores the unique characteristics and responsibilities associated with being a sole trader, clarifying why the second statement is the most accurate representation of this type of business entity.