Turner Little ask; What is the difference between a Limited Company and a Sole Trader?
In very simple terms, as a sole trader, you are the business, you own all the business assets and you take all the liability when it goes wrong.
Operating a Limited Company on the other hand means that you are simply an employee of the company; you can still own the company but the company owns the assets and when things go wrong the company takes all the liability and not you. There are exceptions to this if as the owner/director of the company you do something silly or act illegally, then the liability in exceptional circumstances can pass to you.
The main advantage then is that liability is removed from you personally and placed firmly on the company. There are other advantages though and these are just a few:
- You can reduce your tax burden.
- You can deal with other companies who flatly refuse to deal with individuals – this is an ever increasing phenomena relatively new to the UK.
- If the company goes bust you have ‘Limited Liability’.
- If County Court Judgements are made they are against the company and not you personally except in exceptional circumstances which we would advise you to avoid.
- If the company goes into bankruptcy, it need not affect you personally, again, except in exceptional circumstances which we would advise you to avoid.
- With a company you can build a business which has a value and can be sold on as a going concern whereas, as a sole trader your business will inevitably be you and much more difficult to sell on.
If you choose to switch from a sole trader to a limited company you could save money; you could earn more take home pay by switching over to a limited company and letting us help with your accounting.
We make it easy for you to set up your own limited company. It only takes a few minutes to take your details and then you’ll have the legal protection afforded by your company. For future transactions or work, your personal assets will no longer be at risk, your business may have greater borrowing power thanks to a separate credit rating, plus you’ll save time separating personal finances from business transactions. In addition, if your business is successful, you are building a valuable asset which when sold could provide for your pension.
At Turner Little Limited we pride ourselves in assisting our clients in all areas of UK Company formations which include the following services all of which are optional:
- Company Secretarial services
- Registered Office provision
- UK Banking arrangement
- Mail forwarding services
- Complete Corporate Image & Logo Design (by qualified designers)
- Letter Head & Business Card Design
- Web Site Home Page Design to Match Your Corporate Image
- Domain Name Registration
Whether it is right for you or not, finding out is only a phone call away. Call Turner Little on 01904 783101 to discuss your requirements.
