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Camberley Accountants Limited
Sep 15, 2022
Limited Company VS Sole Trader
This is an important decision for all business owners to choose a legal structure. However understanding the difference between being a sole trader and a limited company, can be challenging and confusing.
Operating your business as a limited Company has numerous advantages, but it all relies on your circumstances, business objectives, and financial goals.
Furthermore, being a sole trader may appeal to you because it provides you with more freedom in terms of personal obligation to people in your firm, but this independence comes with drawbacks.
The key difference is a sole trader is responsible for both personal and corporate debts. This means putting personal assets at risk if business doesn't make any profit. In contrast, the finances of a limited company are separate from the Director's personal finances. So they are only liable for the money they put into the company.
However, if profits is below £20,000 then there really isn’t much of a difference between a sole trader and a limited company in terms of taxation.
Below is the compare and contrast of Sole Trader and Limited company, for information purpose only.
Coming soon!!!