Should You Be A Sole Trader Business Owner?

Commercial Law Posted 27 January 2025

Here at Burgh Thorpe Solicitors our commercial solicitors love helping small business owners at the start of the journey. It is such an exciting time, but it can be confusing too. With such a diverse range of business structures it can be hard to know which business is right for you. That’s where our commercial lawyers in Peterborough come in. We will take the time to understand you, your business and your business goals. Based on this, we will help you choose the best business structure suited to you.

In this blog post we look at why you may want to be a sole trader business owner and the benefits of being a sole trader. Generally speaking, a sole trader is one of the simplest business structures. It is also one of the most popular. So how does this business structure compare to other business structures?

What Is a Sole Trader Business Owner?

A sole trader is someone that own and operates the business as their own. As a sole trader business owner, you are responsible for all aspects of the business. This includes any debts or liabilities. You must register with the HMRC. In turn, you must comply with all legal obligations of self-employment.

What are the Advantages of Being a Sole Trader?

One of the biggest advantages of being a sole trader is that it is a simple and low-cost business to set up. It is easy to set up and easy to maintain too as there are few regulatory requirements. This is especially the case when compared to other business structures. As the owner of a sole trader company, you will have complete control over your business decisions and profit. You will also be able to enjoy certain tax advantages too.

What are the Disadvantages of Being a Sole Trader?

When you are the owner of a sole trader company you have unlimited liability. In simpler terms, this means that you are personally responsible and liable for all business debts. This can put your personal assets at risk if your business was to have any financial difficulties. You may also face limitations when it comes to business growth too, due to the reliance on a single individual.

 

If you are seeking independent legal advice for your new business, speak to our friendly commercial law experts in Peterborough. We can talk through your business plans and goals to help create the right structure for you and the future of your business.