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A sole trader is a self-employed person. In a sole trader business, there’s no legal separation between the person and the business. Our free guide explains what it means to be a sole trader in more detail.

Are sole traders different to company directors?

If you own and run your own limited company, you might think of yourself as self-employed but you’re not a sole trader. You’re technically an employee of the company.

Being a sole trader is probably the simplest way to start running a business. There are fees to register, and you apply to register online. Unlike company directors though, you’re personally liable for any debts the business incurs.

Startup business accountancy services

As a sole trader, you’ll be the one who runs the business, makes all the decisions and does all the work. It means you have full control.

You don’t need to register with Companies House, or make your accounts public. You’ll still have to submit a Self Assessment tax return each year though!

It’s generally more tax efficient to start a business as a sole trader, and then incorporate it as a company as it grows. This depends on how much profit your business makes.

Chat to one of the team about starting your business using our Live Chat service, or get an instant quote online.

About The Author

Lee Murphy

MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.

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