Screencast: Sole trader vs limited company

Most start-ups have to decide whether to launch as a sole trader or a limited company. But what’s the difference between the two?

In this short screencast, Emily Coltman, chief accountant of Enterprise Nation partner FreeAgent, gives a quick run-down of the costs and benefits of sole traders and limited companies, including:
  • The advantages and disadvantages of being a sole trader and a limited company
  • The legal differences between you and your business
  • What paperwork you have to fill in
  • The potential tax advantages of both forms of business.
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Have your say

Alan Briggs
Alan Briggs

Good clean explaination of the issues. AS a Business Adviser, one other aspect that I ask businesses when I am discussing these options is the market perception in their sector ie as an IT business the norm is to be a limited company if providing consultancy or business support.

Kevin Partner
Kevin Partner

Clear explanation of the basics. I'm not sure the paperwork involved in Ltd companies is such a big deal - after all an accountant will deal with all of it (although, for my companies, I always handle the annual return myself) and it can mostly be done online.
For me, the critical issue is that Ltd companies separate you from your business, giving some insulation against malicious legal action, the vagaries of the banks or fortunes of war. Personally, I wouldn't consider running anything other than a ltd company for this reason - I like to know my house is my own!
Kev
(ps: not sure about the music on the video - it may be better without)

Kevin Partner
Kevin Partner

Clear explanation of the basics. I'm not sure the paperwork involved in Ltd companies is such a big deal - after all an accountant will deal with all of it (although, for my companies, I always handle the annual return myself) and it can mostly be done online.
For me, the critical issue is that Ltd companies separate you from your business, giving some insulation against malicious legal action, the vagaries of the banks or fortunes of war. Personally, I wouldn't consider running anything other than a ltd company for this reason - I like to know my house is my own!
Kev
(ps: not sure about the music on the video - it may be better without)

Spencer Stern
Spencer Stern

This short screencast really gets to the point about setting up as a Sole Trader or LTD company. I would like to add that the "legal status" of a business has little or no bearing on the future success of it.

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