If you’re a small, one-person business you can begin trading as a ‘sole trader’.
It’s the simplest legal business structure and quick and easy to do – but there are some real advantages to moving to becoming a limited company, rather than a sole trader.
Sole trader – the negatives:
- If your ambitions change, there’s less scope to scale – and it’s harder to raise capital.
- As the business owner, you’re fully liable – your personal finances aren’t separate.
- As a sole trader, you and the business are legally seen as one and the same thing.
Limited company – the positives:
- Your limited company is a separate legal entity.
- Liability remains with the company, rather than with you personally.
- If you’re ambitious, or have plans to scale, it’s a good structure for the business.
- Being limited and VAT registered makes your brand more credible and professional.
- You’ll be paid through dividends – which will usually mean paying less in tax.
- A limited company is relatively cheap to set up, considering the benefits.
- You’ll find it easier to secure funding for a limited company, rather than as a sole trader.
Moving to a limited company structure helps you to build a scalable business that’s got the flexibility you need to grow and expand to meet your business goals.
If you need help setting up your new limited company, give us a call on 01454 300 999 or drop an email to firstname.lastname@example.org