Sole Trader Type Company in the UK

Sole Trader Type Company in the UK

Sole Trader Type Company in the UK

What is a Sole Trader in the UK?

Sole Trader Type Company in the UK is the type of legal structure of businesses in the UK, which makes one person responsible for all the affairs of the business. This one person owns the business, has complete authority, and is held responsible for all the matters regarding the business. The business owner and the business are a single entities in this case.

Sole Traders do not have to go through much paperwork, formalities, or documentation. Instead, the whole process remains very simple and easy to manage. The structure has both advantages and disadvantages.

What are the advantages of being a Sole Trader?

Being a Sole Trader Type Company in the UK offers you the following advantages:

Less Time Consuming/Immediate Start

The process is very simple and no complex registration process is needed. Therefore, you can start almost immediately.

Minimum Paperwork

Unlike large companies, Sole Trader does not have to pay Corporation Tax. Similarly, they do not have to file tax returns to the government either. This results in minimum paperwork and almost no recordkeeping.

Privacy and Control

Being a sole trader, you do not have any partnerships or shareholders. Instead, you are the sole owner of your business and can control all the matters of your business. Similarly, you are the only authority in your business. Therefore, you can make all the decisions about your business without any interference.

Also, the business details remain private without any submissions to Companies House or HMRC.

You Keep All the profit

In Sole Trader type model, you do not have to share or split any profits. Instead, you are fully allowed to keep all the profit for yourself.

Disadvantages of being a Sole Trader:

Just like everything else, being a sole trader has certain disadvantages, as well. These include the following.

Unlimited Liability:

Unlike limited companies, Sole Traders have unlimited liabilities over their business. Since business owners and businesses are single entities, they have to pay all the debts and losses of their business. As a result, your personal assets can also be a risk in these circumstances.

Heavy Taxations

Though you do not have to split the profits, but still sole traders have to pay almost 20%-45% of their revenues in taxes. On the other hand, limited companies pay only 19% taxes.

No Protection for Business name:

Anyone can trade under your business name if you are working as a sole trader. This makes your business insecure and less credible.

Being a sole trader has both advantages and disadvantages. And, you may choose your company type depending upon your requirements. We believe that Liscard Business Centre can greatly help you in choosing the right structure for your company.

Liscard Business Centre

Liscard Business Centre is a company formation service that offers different packages for company formation in UK. If you want to register your businesses anywhere in the UK (that includes England, Scotland, Wales, and Northern Ireland), Liscard Business Centre would be pleased to help. We can help you in forming your companies in much shorter periods of time while also saving you considerable sums of money.

Registration, Documents Verification, Banking Details, Statements of Association, and Official Addresses are all managed by Liscard Business Centre.

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