The most common question we get asked by start up businesses is whether it is best to trade as self-employed or through a limited company. Rather than offer blanket advice, we prefer to consider each person’s situation individually. The best answer for you might not be the same as for a friend whose circumstances are different to yours. It can be expensive to make a mistake and so obtaining good advice at the start of the business is very important.

Here are some initial questions you may want to consider:

· Are you involving other investors who will own shares?
· Are there risks to mitigate that cannot be covered by insurance?
· Are there tax advantages for you in taking a mix of salary and dividends?
· Is it necessary to incorporate in order to compete in your business sector?
· Do you want to appear larger than you actually are?

Your answers to these questions will begin to guide you as to whether trading through a company might make sense for you. But remember that the level of administration as well as your costs will increase so it needs to makes sense for you (and not just your accountant). And you can always start as self-employed and incorporate once the business starts to trade more successfully.

If you want to discuss your situation then please do get in touch so we can advise you before you have committed yourself to a particular course of action.

This entry was posted on Thursday, December 17th, 2009 at 4:40 pm and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.