Credicorp

Sole trader

A sole trader is an individual who runs a business in their own name, without forming a separate legal entity. In law there is no distinction between the person and the business: the individual owns all the assets, keeps all the profits, and is personally responsible for all the debts. It is the simplest way to trade, but it carries unlimited personal liability.

Legal status: No separate entity — the individual is the business.
Liability: Unlimited and personal; there is no limited-liability protection.
Contrast: A limited company or LLP is a separate legal person.

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Sole trader versus limited company

The key difference is legal separation. A sole trader and their business are one and the same, so the individual bears the debts personally. A limited company or LLP is a separate legal person, which gives its owners limited liability. This distinction also affects how borrowing is treated: lending to a company sits outside the consumer-credit regime, whereas lending to an individual sole trader can fall within it.

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Why the distinction matters for borrowing

Because a sole trader borrows as an individual, that borrowing is treated very differently from lending to a company. It can engage consumer-credit protections, and the individual is personally liable. Lending to a limited company or LLP, by contrast, is to a separate legal entity, with no automatic personal liability for its directors or members.

Sole traders and Credicorp

Credicorp lends only to UK limited companies and LLPs — not to consumers or sole traders. A sole trader is therefore not an eligible borrower. A sole trader who wishes to access this kind of business lending would first need to operate through a limited company or LLP. Credicorp is an independent UK lender, not affiliated with Credicorp Inc of Peru, Credit Corp of Australia, or any other Credicorp entity outside the United Kingdom (Company No. 16093826; ICO ZC157682).

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