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Company Or Sole-Trader?

Another question you need to answer is whether you are going to set yourself up as a company or a sole-trader.

Once again you need to think about positioning.

Do you want to give the impression that you are a formal limited liability company or that you are a one-man band?

I set up all of businesses as limited liability companies for several reasons – let’s look at why I chose that route:

• I wanted to separate my personal affairs from my business affairs

• I wanted to make sure that any issues that I had with my business did not affect my personal possessions

• I could insure the business as a separate entity

• I wanted to give the impression that I am a formalised corporation

I also wanted the piece of mind knowing that if something did not turn out right and some people tried to take advantage of the suing culture that we now have, that I was protected.

Therefore, by having professional indemnity insurance and liability insurance on the business instead of my name I could safeguard against my house and my own private assets being called up in the unlikely event that the insurance did not cover the amounts being asked for.
It’s a small detail but one well worth thinking over.
 

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