How to Find a Premises for your Business
1. Make a specification for your ideal premises considering internal and external factors.
2. Should I license, lease or buy my work premises?
3. Where do I look for commercial premises?
Resources for finding the perfect property
How to Start an Online Business in the UK
Get your online business idea
Create a business plan
Choose your online business model
Decide your business name and register
Prepare for the costs of setting up an online business
Build your website
How to Start a Business (Limited Company)
8 steps to set up your limited company
1. Decide if forming a limited company is right got you
2. Register your business
3. Employing someone as a limited business
4. Get an accountant
5. Do you need to register for VAT?
6. Understand your tax
7. What insurance do I need?
8. What are your responsibilities as director?
How to Start a Business (Sole Trader)
7 steps to set up your business as a sole trader
1. Decide if being a sole trader is the right set up for you
2. Register with HRMC
3. What to do if you employ someone as a sole trader
4. Get an accountant
5. Do you need to register for VAT?
6. Understand your tax
7. What insurance do you need?
Sole Trader vs Limited Company
What are the pros and cons of setting up as a Sole Trader vs a Limited Company?
Sole Trader
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Limited Company
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Financial Liability
If your business runs up any debt you are legally required to cover it, this may mean even selling personal assets.
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Financial Liability
By setting up a limited company your business becomes a separate legal entity. Therefore if the business does run up debts the business, rather than you personally, are responsible.
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Status
You can build a great reputation as a sole trader and many customers won’t know the legal ‘status’ of your business or, to be honest, care! They are there for your amazing products and service after all.
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Status
Having said that, some suppliers & clients may feel more secure dealing with a company that has gone through the formation process. Once you get larger and becoming more prominent it may be time to form a limited company.
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Finance Options
Along with being financially liable for the business, raising funds may be more difficult. Options as a sole trader include; savings, friends & family lending, go fund me pages, and some banks will loan you money however you may be considered too ‘high risk’ and refused. But if your over-heads are low and your cash flow good this may not be a concern for you.
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Finance Options
You will have more financial options open to you and be more likely to be approved for a loan from a bank or lending organisation. All the options of a sole trader will be available to you along with more official routes. If you need a premises to operate from, need to buy equipment or require some start-up cash to get you going forming a limited company will make it easier when applying for finance.
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Personal Details
Increased privacy. Your personal details won’t be published on Companies House.
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Personal Details
You will have to publish your name (as a director), the names of fellow directors and your business address on Companies House. You can limit the amount of information out there by registering with a secretarial business service eg business address but some details have to be made public.
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The Name of Your Business
Business name protection. As a sole trader you may be worried about others operating with a similar name to take advantage of your good reputation, advertising efforts and word of mouth promotion from customers. You can take out Business Name Protection here with NBR to stop this from happening.
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The Name of Your Business
No one can use the exact same business name as you, they legally won’t be able to form the company. However this doesn’t cover you in every situation, they could add an ‘s’ to the name or ‘solutions’ etc so their name ends up being very similar to yours. You can take out business name protection to stop this, find out more here.
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Tax
Tax can be substantially higher for sole traders, especially when you’ve established the business and are pulling in a good amount of money. Sole traders can be charged between 20%-45% tax on their profits (minus allowable business expenses).
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Tax
Tax for limited companies is lower and they are generally considered more ‘tax efficient’. They are required to pay only 19% on their total profits (minus allowable business expenses).
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Administration Requirements
There is less paperwork to do as a sole trader. You will still want to have an accountant but in terms of legally required documentation there’s less than a limited business.
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Administration Requirements
More paperwork to do with legal annual documentation having to be submitted. As with being a sole trader getting an accountant is a great idea, they will be able to help you with all the paperwork and requirements.
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Employment
You can employee people as a sole trader. Make sure you have insurance and are set up correctly with a PAYE scheme and pensions with HRMC. This is were an accountant will come in handy.
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Employment
As with a sole trader you need to set up a PAYE scheme with HRMC for any employees you have and take out the right insurance to cover them.
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Insurance
As a sole trader you are less likely to have to need different kinds of insurance but check out our ‘Sole Trader’ article where we outline the basic forms of insurance to consider.
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Insurance
As a limited company you may want to take out insurance. We have covered the basic forms of insurance in our ‘Limited Company’ article. One to particularly consider, as a limited company, is individual director insurance.
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