would i be better as a limited company or as a sole trader and if its limited what are the benefits?

Answer 1

it all depends on what you base your decision on. whether it be protecting yourself against debt, ie, if the company goes bust, it is unlikely you will not be liable

or save your self from paying more tax as you would pay more going self employed.

if you go ltd, then you can take a minimun salary equal to the personal allowance, currently £5225 a year, this amount is tax free. you can then take more money out via dividends based on the shares you have in your company. shares are taxed at 10% until higher rate which is 32.5%.

if you went self employed, tax would be 10% on the first 2230 after the £5225 which is tax free, and then 22% until 33600 and 40% after that, so you would save tax going ltd, and protected personally from debt, as long as creditors dont request a personal guarantee,

however, having a ltd company costs more in administration and accountancy fees, also there is more paperwork to be done too like annual returns and agm meeting notes etc..

the time and extra cost from having a company may offset the tax savings tho depending on how much money you expect to make.

its never easy to answer this question on here, best bet is to contact a local firm of accountants who should give you a free consultation and explain all the pros and cons too you.

Answer 2

I think you would benefit being a limited company than a sole trader. Some of the benefits of being a limited company include limited liability for all the shareholders, the finanical accounts and affairs are kept private and there is no fixed amount to start a limited company.

Answer 3

Sole traders: No direct legislation, almost anyone could just set up a business Sole trader holds all liability but also control.

Ltd company:
>Members and shareholders of a company have limited liability, if fraud is committed then can have unlimited liability
>Disadvantages are the burdens of regulations CA 1985
>Responsibilities to others in law
>Duties owed to the company
>Documents are public and accounts have to be published.

Answer 4

It would have been nice to know what your company does.

However, I entered "limited company versus sole trader", without the quotes, into my favorite search engine, and got TONS of results, though most are blogs; that's not necessarily bad, as it will give you multiple forums from which you may find good answers.

The links below should give some presumably unbiased answers.

Good luck! Cheers!

Answer 5

It depends on the level of risk involved, and how much you have to lose. If you have a wife, house and kids to protect then go Ltd. If you have little to lose, stay free of the red tape and grow.

Answer 6

no