What type of business is owned and run by a single person who bears all profits and responsibilities?

The correct answer is a sole trader. This type of business structure is characterized by its ownership and management being carried out by one individual. As a sole trader, this person has complete control over the business operations and receives all the profits generated. Additionally, they bear all the responsibilities and obligations related to the business, including debts and liabilities.

This structure is often favored for its simplicity and ease of setup, as there are fewer regulatory requirements compared to other types of business entities. Sole traders have the benefit of being able to make decisions quickly without the need for consensus from partners or shareholders, allowing for greater flexibility in operations.

Other business types, such as partnerships, cooperatives, and corporations, involve multiple owners or more complex management structures where responsibilities and profits are shared among different parties. In partnerships, two or more individuals share ownership and liability, while cooperatives are owned and run for the benefit of members. Corporations are separate legal entities owned by shareholders, meaning profits and responsibilities are distributed based on ownership stakes, rather than held by a single individual.