27 Dec The main advantages of setting up as a sole trader
A new year heralds a new start and is a time when many consider setting up a new business venture. When you start a business, the first thing to decide upon is whether to create a limited company or go in as a sole trader.
There are pros and cons to both routes, with the disadvantages of acting as a sole trader quite severe, but on the flip side of that, there are many advantages to such a move.
Here are some of the benefits you get from being a sole trader.
Work for yourself
The main advantage of being a sole trader is that you are your own boss, and what you put into the business is generally going to be what you get out of it. You can control the direction the venture goes in at all times and do not need to get approval from a board of directors or such like. You have a certain amount of freedom, which appeals to plenty who start up as a sole trader.
Profits are yours
Another appealing factor is that all the profits are your own. If you were to go into partnership with someone, for example, then you would have to split the profits equally, but that isn’t the case as a sole trader. Everything you make you keep!
Minimal costs to set up
There are few costs to set up as a sole trader so that is very much an advantage. Were you to be a limited company you would need to register at Companies House which is a costly exercise. Registering with HMRC is free, however, so your budget can be spent on other areas of your venture.
Easy to start
It is a whole lot easier to start up as a sole trader rather than a limited company. All you have to do is inform HMRC and make sure you register as self-employed. You can do this by filling in a form online, which is the quickest way of starting a business.
If you act as a sole trader you do not need to share any records anywhere, unlike with a limited company where Companies House would need to know directorship and shareholder information, as well as details on the business which are then available to the public. If you operate as a sole trader you have the opportunity to keep all those details private.
Are you looking for accounting help regarding starting up as a sole trader? Get in touch with SQK Accountancy for all the support that you require.