Which term refers to an owner who runs a business personally and bears all responsibility?

Which term refers to an owner who runs a business personally and bears all responsibility?

• A. Owner
• B. Sole Trader
• C. Producer
• D. Co-operative

Answer: (B)

This question tests understanding of business ownership structures and personal liability. A sole trader is an owner who runs the business personally and bears all responsibility for its debts and obligations. That means the business and the owner aren’t legally separate, so the owner keeps all profits but also has unlimited liability, risking personal assets if debts arise. An owner by itself doesn’t specify who runs the business or how liability is shared. A producer refers to someone who creates goods or services, not a particular ownership form. A co-operative is owned and run by its members collectively, with shared decision-making, not by a single person bearing all risk. Therefore, the term that best matches “an owner who runs the business personally and bears all responsibility” is sole trader.

This question tests understanding of business ownership structures and personal liability. A sole trader is an owner who runs the business personally and bears all responsibility for its debts and obligations. That means the business and the owner aren’t legally separate, so the owner keeps all profits but also has unlimited liability, risking personal assets if debts arise.

An owner by itself doesn’t specify who runs the business or how liability is shared. A producer refers to someone who creates goods or services, not a particular ownership form. A co-operative is owned and run by its members collectively, with shared decision-making, not by a single person bearing all risk. Therefore, the term that best matches “an owner who runs the business personally and bears all responsibility” is sole trader.