If you’re considering starting your own business, then you’ve probably thought about whether you should set up as a sole trader or limited company.
The differences between the two aren’t always that large but for smaller, DIY home businesses, the sole trader option is often the best.
So, what are the main benefits of being a sole trader and how will they affect you?
As a sole trader, you will have complete control over every element of your business. From the finances to the decision making, it all lies with you. Whilst this prospect is scary for some, others like the idea of complete ownership. In fact, it can actually make it easier for small businesses to run successfully when there is less paperwork and people involved.
Another benefit of setting up as a sole trader means that you and your company’s details are completely private. When you register as a Limited Company, your business details are easily accessible by anyone through Companies House.
This isn’t always favourable for small business owners, especially those who work from their own home, so setting up as a sole trader can protect you from a number of privacy issues.
As a sole trader, you’ll get to keep 100% of the profits you make – after tax of course. There’s no costly corporation tax to pay and you can decide what proportion of your money goes back into the business, as well as what goes into your pocket.
This is perfect for one person companies who want to run a niche business on a smaller scale.
If you want to set up a business in minutes, then a sole trader status is the right one for you. All you need to do to become a sole trader is ring up HMRC and give them a few details about your business. This includes the name of your company, the date you started trading and your line of work.
Alternatively, you can do this on the HMRC website if you don’t need to speak to someone in person.
Sole trader status is the best option for those looking to keep their business small. As a sole trader, you can offer your clients and customers a service that is more niche and personal. You can work more closely with local people, local businesses and offer a friendlier alternative to big business.
In addition to this, you’ll be able to make decisions that are right for your business quickly and easily without ever having to confer with anyone else – perfect for people who are itching to be their own boss.