The Sole Trader structure offers minimal asset protection as the business assets are owned personally. This is what is referred to as unlimited liability, meaning that all business debts are also owned personally by the individual.
Partnerships offer liability protection depending on whether it's a general partnership or limited partnership. A general partnership offers no liability protection. Within limited partnerships there are two types of partners, general and limited. General partners are responsible for the day-to-day running of the limited partnership and their debt is unlimited. Limited partners do not take part in management and have their liability limited to the amount contributed to the partnership.
Companies enjoy a greater degree of asset protection due to the fact that they possess limited liability. This means that any claims creditors have over the shareholders are limited only to the amount of shares they own in the business. Any claim that creditors have over the business cannot be extended to the shareholders' personal assets.