I was looking for the correct formal and legal term that describes a company/firm with one employee.

I came across different terms: one-man business, one-person enterprise, sole proprietor--of which I was not able to determine the most appropriate one and the difference between these terms.

  • Different countries probably have different legal terms. UK uses 'sole proprietor'. The others may be 'description' rather than legal status. Commented Jul 6, 2018 at 6:34
  • Please write your answer as an answer, not as a comment.
    – James K
    Commented Jul 6, 2018 at 6:38
  • Useful: english.stackexchange.com/questions/10841/…
    – Maulik V
    Commented Jul 6, 2018 at 6:39
  • As a minor aside, I wonder whether a person might be "employed" by the sole trader company he/she established. What might be the best description of this person's relationship to the company? Commented Jul 6, 2018 at 9:56

1 Answer 1


In the UK, the legal term is "sole trader", (see https://www.gov.uk/set-up-sole-trader). This is one of the classes of company under tax law (the others are a "partnership", a "private limited company" and a "public limited company").

A sole trader can employ any number of employees, but they have no stake in the business. A typical example would be an independent plumber.

(It would be possible to set up a limited company with one director who is also the only shareholder, but this would be unusual.)

I believe the legal US term is "sole proprietorship"

You would normally only use "sole trader" in a legal context. In casual contexts you could use any of the various examples you give in the question

If you are earning more than £1000 by selling hairbows on etsy, you should set up as a "sole trader" and register for tax self-assessment, otherwise you could find yourself arrested for tax evasion.

I heard Mary's one-woman business is doing really well, she made £8000 pounds last year selling hairbows!

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