Ltd. company or sole trader?
Thread poster: Stuart Robertson

Stuart Robertson  Identity Verified
United Kingdom
Local time: 07:37
Dutch to English
+ ...
Jan 15, 2008

I am seriously considering going freelance in the coming months and am in the process of drawing up a business plan. My question is with regard to legal structures of the business.

It seems that many people on here believe that setting up as sole trader is preferable to setting up as a Ltd. company. Nevertheless, from the info I have come across, it would seem more beneficial to set up as a Ltd. company, as you pay less tax/NICs etc., reap more benefits in terms of dividends and, should it prove difficult to gain clients, it seems that as a Ltd. company, you will not be personally liable for the debts of the company should it go bankrupt.

What is the reason therefore that many people set up as a sole trader? What are the benefits to becoming a sole trader?

Many thanks for your input in advance!

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Ltd. company or sole trader?

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