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mochyn

Being a sole trader...

What are the advantages? I've always been a sole trader because I've never had a business partner, never emplyed anyone, never earnt a lot from my own business. How can I make that sound good in a business plan? Laughing
Shan

The advantage of being a sole trader is that is is relatively easy to administer as opposed to being a Limited Company. People will tell you that as a Limited Company that your personal liability is limited to what you invest in the company BUT try getting a loan these days from a bank without signing a personal guarantee.
crofter

I would not try to make it sound good, just put it in there as a statement of fact. Keep the whole thing concise. If you are planning to continue as a sole trader, say that too.
dpack

as a sole trader accounting is simply bookkeeping and simple tax if you earn owt ,

limited comp needs accounts to be audited (1000 quid upwards ) but you are protected in that the comp is treated as seperate to the directors (perfect if you want to open an asbestos mine or scam slimmers )

the extra overheads of being a ltd co are not required if you wish to make wooly stuff by hand at home ,
i did the ltd co way when i ran the building firm ,it made sense as getting public liability insurance ,paying tax and ni for employees and sorting subcontractors payments to outsiders and sometimes to us from outsiders needed complex books anyway so the audit fees were a minor overhead

if the audit fees are likely to be more than 1% of turnover stay a sole trader Wink
dpack

there are some serious advantages to ltd co if you have a good tax accountant and the turnover to pay for their expertise
mochyn

Thanks for that, chaps. More or less what I thought.
Shan

as a sole trader accounting is simply bookkeeping and simple tax if you earn owt ,

limited comp needs accounts to be audited (1000 quid upwards ) but you are protected in that the comp is treated as seperate to the directors (perfect if you want to open an asbestos mine or scam slimmers )

the extra overheads of being a ltd co are not required if you wish to make wooly stuff by hand at home ,
i did the ltd co way when i ran the building firm ,it made sense as getting public liability insurance ,paying tax and ni for employees and sorting subcontractors payments to outsiders and sometimes to us from outsiders needed complex books anyway so the audit fees were a minor overhead

if the audit fees are likely to be more than 1% of turnover stay a sole trader Wink


Accounts do not need to be audited as a Limited Company if you qualify as a small company, which is most likely to be Mochyn's case. She would have to submit abbreviated accounts.
dpack

ps my gsd/wolf was an employee and got her food vets bills etc taxfree .the company owned all my clothes ,the company owned all tools and cars etc which has tax advantages ,it is easier to be taken as established and respectable as a ltd co ,which in building makes a lot of difference to getting first contracts from clients

i recon a simple statement of "as a sole trader i can minimize my accountancy overheads until turnover and /or staffing levels require a different structure " would be fine in your business plan
dpack

maybe the 715/716 stuff put us in a different position ,seems a lifetime ago
mochyn

So far I've put "I am trading as a sole trader mainly for ease of administration as there is, at present, no-one else involved in the business. As FTH grows I would like to employ staff and will then review my legal status, possibly becoming a Limited Company."
       Downsizer Forum Index -> Small Business Questions, Ideas and Advice
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