There are two basic options available to you when you decide to "go it alone" and start your own business. What options you choose will depend very much on what sort of business you have and how big you plan to grow it and if you have plans to grow and expand, or if you simply want something to do for yourself that will pay the bills.
The first option is to simply register as self-employed. This means you are a sole trader. The great thing about being a sole trader is that it is simple. It costs nothing to really declare yourself as such, and after you file your own self-assessment every year, you keep all profits, and remain in complete control of things. It's all relatively simple.
However another option is to actually set up a company. It all sounds very formal. Setting up a company does not mean you are planning to employ 20 people overnight. It simply means that you set up something completely independent from you, and then you essentially become an employee of the company. There is a cost to setting up, and more is involved when it comes to taxes, but in the long run, it is often seen as the better option.
The appealing part of setting up a company is the fact that you are less at risk. When you are sole trader, you may keep control and retain all profits, but if you run into trouble, it's all on your head. When you are a company, you are essentially an employee of the company, and you won't bear the full brunt of the business going under if that were to ever happen.
It is actually much more simple to set up a company than people would think. It is often something that can be done online for a token cost, and it can all go through in a matter of hours. Many people who decide to become self-employed go this route as just taking an added measure of security. It is not as simple as being simply self-employed, but it may be worth it in the long run.
The first option is to simply register as self-employed. This means you are a sole trader. The great thing about being a sole trader is that it is simple. It costs nothing to really declare yourself as such, and after you file your own self-assessment every year, you keep all profits, and remain in complete control of things. It's all relatively simple.
However another option is to actually set up a company. It all sounds very formal. Setting up a company does not mean you are planning to employ 20 people overnight. It simply means that you set up something completely independent from you, and then you essentially become an employee of the company. There is a cost to setting up, and more is involved when it comes to taxes, but in the long run, it is often seen as the better option.
The appealing part of setting up a company is the fact that you are less at risk. When you are sole trader, you may keep control and retain all profits, but if you run into trouble, it's all on your head. When you are a company, you are essentially an employee of the company, and you won't bear the full brunt of the business going under if that were to ever happen.
It is actually much more simple to set up a company than people would think. It is often something that can be done online for a token cost, and it can all go through in a matter of hours. Many people who decide to become self-employed go this route as just taking an added measure of security. It is not as simple as being simply self-employed, but it may be worth it in the long run.
About the Author:
Lisa Webb is a widely respected writer who has been writing for 5 over years often writes on Company Formations 123 and a wide range of other subjects.
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