Is Being A Sole Trader Right For My Business?

If you are just setting up your own business, you may be wondering if being a sole trader is the right set up for your business. There are a number of different business structures, and it can be hard to choose the right one for you. This is especially the case when setting up your own start-up business for the first time.

But don’t worry, help is at hand. Here at Burgh Thorpe Solicitors, we have a team of start-up specialist corporate solicitors. We are here to help you set up the right business for you. We do this with your best interests at heart, to ensure your business runs the best possible way for you.

What is a Sole Trader structure?

A sole trader is a business that is owned and operated by one person. However, sole traders may have employees. This is why the sole trader is a common business structure for small and start-up businesses. It is also a common business structure for trades such as electricians and plumbers, for example.

It’s relatively easy to set up for your business as a sole trader. You will need to register with the HMRC for self-assessment. In addition, your need to fie an annual tax return. You may also need to pay National Insurance.

Sole Trader structure advantages:

There are many advantages to setting up your business as a sole trader. For example, sole traders are generally hands-on and very involved in their own business. This is an easy entity to control. The capital investment to set up as a sole trader is generally quite low too. You will find that the wages bill will be relatively small. This is because as a sole trader you are likely to have only a handful of employees.

Sole Trader structure disadvantages:

When you run your business as a sole trader you are personally liable for the debts and liabilities of your business. You may find that you feel forced to work long hours. You might also find it hard to take holidays or days off sick as the business relies on you. As a sole trader you will be responsible for running all aspects of the business. This includes sales, marketing, accounts, doing the actual work and so much more. As a sole trader it can be difficult to grow your business. This is because you are limited to the amount of capital you can raise personally in many cases.

Looking to set up your start-up business and not sure where to start? Why not call our start-up corporate law specialists? We will happily talk you through everything you need to know about the legalities and legal protection we can help you and your business with.