In the light of a new venture between BRAVE and Jordans, we take another look at choosing the best form for your business.

 

1. In the current climate, with recession in full swing, the risks can be even greater. So get the right advice. Ask your solicitor, accountant or business adviser.

 

2. Be aware of what could happen if things go wrong. Setting up as a sole trader is quick, cheap and easy. However, if things don't go smoothly, the debts of the business will have to be met by the sole trader. This could mean that creditors send in the bailiffs to seize assets such as electrical goods or furniture. If the losses are great, the trader may be forced into bankruptcy or lose their home.

 

3. Protect your personal assets. Trading through a limited liability company takes a little more time and cost to establish, but provides the protection of limited liability. This means that if the business fails, the creditors do not have recourse to the personal assets of the directors or shareholders.

 

4. Balance the costs against the protection provided. This protection comes at a price. Depending on your turnover, you may find that you pay more tax than you would as a sole trader; so talk to your accountant first. There are also the costs of setting up the company and the ongoing costs of managing the company, as accounts will need to be prepared and various filings made at Companies House.

 

5. Consider the commercial benefits. Clients and suppliers may perceive, rightly or wrongly, that the business is more stable, more reliable, even more reputable if it is in the form of a limited company.

 

Jordans, the UK's leading company registration agents, are delighted to be working with BRAVE to enable them to provide clients with fast, value-for-money company formations with the very latest in electronic company registration software.