Sole trader

[Spidey]

Please forgive me if my question is silly questions but i want to understand what is the best way to start my own business.

Im working part time for myself and fulltime in paid emmployment. I want to make my business official, am i best trading as a sole trader? Ill only be working part time for my business and the turnover wont be more than £20k.

Thanks again.

[stratigen]

The answer to this question isn't black and white.

The advice I'll share is generic, and you should seek specific advice based upon your own, unique personal circumstants.

In general terms, a small, simple, low-risk business (e.g. web design, freelance IT, window-cleaning, etc.) is fine operating as a Sole Trader; make sure you have the right indemnity insurance in place, obviously.

The main benefits of Limited Companies are they're more tax efficient overall (at higher profit levels), and provide additional legal protection. The main disadvantages are the additional overhead in terms of compliance paperwork.

The main benefits of going Sole Trader as it's simple. But, you need to realise that there is no difference between you and the Business, in effect you are one and the same.

This means, if your business was sued - you are being be sued. Or, if your business had a debt - it's your debt. As a Sole Trader, your assets - house, car, bank accounts, etc., are always on the line.

I hope this brief overview is of use.

[Spidey]

Thanks for your consice answer SJ its confirmed what i thought. I dont want to get bogged down in unnecessary paper work if possible I think being a sole trader is probably best for me.

[belimited]

Bang on answer there from stratigen. If you are unsure about the route you should take, speak to an accountant (I've said this so many times on the forum) a good one will be able to save you their fee.

If you want to avoid the extra paperwork initially, you'll be right to go as a sole trader - as a limited company, there are always forms to fill in for this or that, and just when you think you've got them all done, another government department contacts you with more!

[techie]

Going limited means lots more paperwork and bureaucracy, but if limited liablity is important to you it is probably essential.

As others have said, get professional advice if in doubt - most accountants and solicitors will meet you for free for 30 minutes in the hope of winning your future business.

Techie

[Peter Bowen]

It all depends on what you have to lose

Got a lot of stuff in your name - insulate yourself from the risk by using a company.

Got nothing - take the risk until you've established that the concept works and then re-think it

Good luck

Cheers

Pete