Limited Company vs Self Employed: What do I need to know?

Category: Accountancy

There are many decisions to make when starting a business, but one of the first will be:

Do I operate as a Sole Trader or as a Limited Company?

 

It’s often not an easy decision to make and it’s important that you take the time to think over each option, examining the advantages and disadvantages of both to make sure you make the right decision for your business.

You may decide that, if you are operating as a one-man band such as a hairdresser or a plumber then the easy to set-up, minimal paperwork, low expense model of Sole Trader works best for you. If you think that you may want to expand at some point, take on staff, and maybe get premises of your own then it’s probably worth considering setting up as a Limited Company.

Whatever your aims and aspirations are for your new business, there is a solution out there, it just takes a little time to work out what’s best for you. Read on! 

 

Sole trader advantages and disadvantages

 
Advantages

 

 

Disadvantages

 

 

 Limited Company advantages and disadvantages

 

Advantages

 

 

Disadvantages

 

 

Depending on your current situation, one of these operating models will be better suited to you than the other. Hopefully this guide has helped point you in the right direction. 

If you would like help setting up your new business, changing from a sole trader to a limited company or you just have a few more questions that we haven’t answered here, please contact Allison by telephone or send us a message.

Allison Taylor, Tax Advice Leeds Accountant