Small Business Law > Types of Businesses > Sole Trader or Sole Proprietor (Owner)
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Sole Trader or Sole Proprietor (Owner)

A sole trader or a sole proprietorship means one person owns the business. A sole trader does not have to register the business, for example, Vusi starts a shoe repair business which he calls ‘Cool Leather’ and runs it from his home.

If you are a sole trader, the law does not see a difference between the things that you own and the things that belong to your business, which are called assets. This means that the tools which Vusi uses to repair shoes, the table on which he works and the cash register belong to him in the same way that his television set or his bed does.

There is also no difference between the money you owe people and the money your business owes people, which are called debts. For example, the money Vusi must pay for electricity is no different from the money he must pay the man who sells him leather to repair shoes. If Vusi doesn’t pay his leather supplier for leather bought from him, the supplier can go to court to get his money. If Vusi does not have the money to pay the supplier, the court can take away his tools, his TV, his car, or anything that is a luxury, and sell it to pay the supplier.

As Vusi, a sole proprietor, has given the business a name, he must refer to it in any business dealings as ‘Vusi Mahlangu t/a (trading as) Cool Leather’.