A sole trader is not a type of company, but rather an individual who trades on their own behalf. Sole traders are not required to register with Companies House. In order for an individual to set-up as a sole trader they simply need to start trading or carrying on business activities. Sole traders are obliged to register as self-employed with HM Revenue & Customs within three months of starting to trade. The most important point to note is that, unlike the shareholders of limited companies, sole traders do not benefit from the protection of limited liability in relation to their business. Sole traders are personally liable for all of the debts of their business without limit, which means that their personal assets are at risk. For further information about the positives and negatives of operating as a sole trader as opposed to a limited company visit our sole trader page.