What is a sole trader?
A sole trader is a unincorporated business owned solely by one person.
How is it different to a limited company?
As a sole trader you and your business are one and the same, whereas a limited company means that the business is a separate legal entity from you. This means sole traders are personally liable if anything goes wrong in their business.
When you’re deciding on a company formation there are many reasons why setting up as a sole trader might be your best option.
The main reason why setting up as sole trader is so popular is that it’s generally the quickest way to get a business up and running. Operating as a sole trader may also be simpler than a limited company; there is far less administration to undertake it therefore tends to be cheaper to run.
Here are a few reasons why setting up as a sole trader might be the right choice for you:
– No set up costs
– Total Control
Being a sole trader means you can run your business exactly how you want; there are no other directors or shareholders to consult. Having total control also means that you have greater flexibility when it comes to adapting your business to market trends. This flexibility is key to keeping your business competitive and relevant.
– Capital Allowances
Any equipment you need for your business, from vehicles to stationary can be eligible to claim back in your tax returns.
– Maximise your profit
Naturally as a sole trader you keep all and any profit you make with your business. In this vein, the accounting process is generally simpler for sole traders, which means your outgoings are also reduced.
Operating as a sole trader is a lot of responsibility to take on; there is a lot to consider when ultimately deciding your business structure.
Our friendly team are on hand to answer any questions you might have about whether you should set up as a sole trader or whether another structure may best suit your personal circumstances.