Sole trader is an individual who carry on business with a view to making profit without incorporating a legal form. A limited company is a legal entity separate from a sole trader in its own right. Sole trader can not be an employee of his or her business while the owner of a limited company can be an employee of his or her limited company. Sole trader carry full responsibility of the business debt whereas shareholder of a limited company has a limited liability to the extent of the purchase of shares.