What is a significant characteristic of sole traders' governance?

The significant characteristic of sole traders' governance is that the owner is the only decision-maker. In a sole trader business structure, the individual who owns the business has complete control over all decisions, including financial, operational, and strategic choices. This structure allows for quick decision-making, as there is no need to consult with partners or shareholders, which can lead to greater flexibility and responsiveness to market changes.

Unlike other business forms, such as corporations or partnerships, where multiple individuals may have a stake in decision-making processes, the sole trader operates independently. This characteristic can be both an advantage and a disadvantage; while it grants authority and streamlined operations, it may also place significant pressure on the sole trader, as they bear full responsibility for the business's successes and failures.

In contrast, other options highlight aspects of different business structures. Decisions made collectively by shareholders pertain to corporations, where ownership is divided among many entities. Raising funds via venture capital applies to startups and other companies seeking external investments for larger growth, something typically not relevant to sole traders. Lastly, having a separate legal identity is a feature of limited companies rather than sole traders, who do not distinguish between personal and business liabilities.