[Closed] Sole Trader vs. Limited Company

It really depends on what you think your liabilities are likely to be... so depends on the role/industry/contract details..

non-lim and you stand to loose everything you own in the event of your mess-ups, being sued.
lim lots more hassle & expense in the long run, but you have no* danger of loosing your house....

So, if your setting up providing custom tuning for high end super cars, when you might blow up a Ferrari, and get sued then id say, register.

If your going to work a IT developer as a contract as part of a team for a large multi-national, then its probably a risk worth taking....

Are you taking on any financial risk/potential liability that you want to keep separate from your own personal liability? If not then for three months it is unlikely to be worth the hassle of setting up a LTD. You can always do that later. There are plenty of potential exceptions to this rule of thumb but that’s the main one I can think of.

yadda yadda... plus looks more professional quoting and invoicing through ltd...

If you are setting up limited and will be a director just bear in mind that it is your liability as member (shareholder) not as a director that is limited.

While you get insulation from some normal trading liabilities it won't save you if you commit a breach of things like company law, h&s regs, insolvency law etc. and watch out for hidden directors' guarantees in any trade or bank accounts too.

Have you checked with your client what they'd prefer- in some business sectors some companies won't deal with sole traders.

I started as a sole trader for a few months then set up a Ltd company when things took off quickly.

If doing it for just a short spell and not megabucks I'd just go sole trader I think.

If your going to work a IT developer as a contract as part of a team for a large multi-national, then its probably a risk worth taking….

Or in the real world that big multinational will only deal with Ltd Co contractors and you will want professional indemnity insurance.

So my answer is it depends on the business

Also look for PI insurance, PL insurance as necessary for your line of work. This should reduce the risk for either option should things go wrong. I'm am architectural designer, 8 years as a sole trader, nice and simple plus it keeps my accounts private.

lim lots more hassle & expense in the long run

How do you figure that? LtdCo is very little hassle and expense (only extra expense is an accountant, and in theory you could do all that yourself). And, he says donning his flameproof suit, it's more tax efficient.

Limited company is more tax efficient but does take slightly more work. If it is for a short period there are people who do all the work for you for a small weekly fee, these are known as umbrella companies. I used one called boss (southampton I think) when i first did some contracting and it was made very easy.