Sole Trader

Pros and Cons

Setting up as a sole trader is the easiest and quickest way to get started. You alone are responsible for any profits and all losses, and there is no safety net.

Pros:

•  Paperwork is kept to a minimum. 
• You do not need to send accounts to the Registrar of Companies. 
• Losses can be set off against other income you may have when you settle your tax affairs.

Cons:

• You are personally liable for any business debts and could lose personal assets.
• You pay less National Insurance but are not entitled to certain state benefits.
• It can be difficult to transfer ownership of the business.  

 

Compare these factors with those involved when you form a company...