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What is the difference between a Sole Trader and a Freelance?

Last updated: March 07, 2024

Sole Trader

According to the civil code, business activity (ditta individuale, sole trader in english) consists in the professional exercise of an organized economic activity for the purpose of producing or exchanging goods and services. Consequently, in order for there to be a company, the activity must have the following requirements:

  • It must be aimed at the production or exchange of goods and services;
  • It must be an organized activity that consists in the management and coordination of assets and resources;
  • That it is habitual and prevalent or that it is an activity with the "requirement of professionalism", of systematicity, and that it is not sporadic (e.g. a university student who occasionally sells an object on an e-commerce does not carry out a professional activity, therefore is not considered an entrepreneur).

From a purely practical point of view, the artisans (and therefore for example plumbers, carpenters, bricklayers, ice cream makers, pastry chefs, pasta makers, painters, blacksmiths, electricians, mechanics, beauticians, hairdressers, etc.) or traders are individual entrepreneurs (for example wholesalers, retailers, street vendors, door-to-door sellers, etc ...)

Freelance

The freelancer, also known as an intellectual self-employed worker, is someone who carries out an activity with the following characteristics:

  • Which provides for the execution of a work or service upon payment of a fee;
  • That it is organized with mainly own work;
  • Without subordination constraints towards the client.

The freelancer differs from individual firms mainly for the prevalence of his work with respect to the invested capital (understood, in fact, as an "organization"). Freelancers are divided into:

  • freelancers practicing protected professions (journalists, notaries, doctors, etc.);
  • freelancers who exercise a free profession such as business consultants, IT consultants, etc. ..



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