sole trader or ltd

[ac.electrical]

i am trading as a sole trader at the min but im thinking or setting up as a ltd company i was just wondering does any one have any ideas what benefits there are with being a ltd company compared to a sole trader and if they had a choice what would the prefer.

 

[andekoch]

In theory a ltd co removes you personally from the company from a liability/ security point of view although as a director you have most of this handed back again.

Probably a bigger issue is the VAT registration (if doing domestic) although that will affect you if a sole trader as well.

Ltd co has more paperwork to go with it but potentially allows you more flexibility to roll over losses etc.

Talk to a good accountant or even the inland revenue/ business link.

 

[stretchyboy]

Basically if you are truly a 'sole' trader then keep it that way, it's a lot less hassle.
As andekoch says, your only real benefit is the liability which means that if you get sue then you wont lose your house, but i'd be really surprised if a judge ruled you out of your house anyway and if you are reasonably competent then what have you got to worry about. Tax wise you are supposed to be better off, but i'd dispute that in practise.Your accountant fees go through the roof, paperwork increases, etc etc.
Why do you feel the need to go ltd?
If you are a growing company like we were when we went ltd, then our experience is that you need to keep growing once you've gone ltd until you are a lot bigger before the benefits start coming through. Dont think that you can just swap hats and it just works out better for you.