A sole trader generally owns the assets used to conduct the business and may claim deductions in their income tax return for the decline in value of the assets. This is called depreciation. 

A sole trader takes all profits, suffers all losses and is personally liable for all debts incurred by the business. This unlimited liability means that the sole trader’s personal assets can potentially be seized to recover a debt. 

A sole trader can be held legally responsible for anything they do. They can also be held liable for the actions or inactions of any of their employees.