So you’ve decided to work for yourself – what now?

There are important steps to take when thinking about setting up your own business.  Firstly, you should decide whether to be a sole trader, a limited company or a social enterprise (sometimes called not for profit businesses).  The legal structure you decide upon will have implications for how you run your business, how you employ people and the type of documents you will need to produce.  Note that if you decide to be a sole trader,  you and the business are not separated legally, therefore all profits and conversely all debts are yours as well as the business’s.  Depending on the type of trade, you might decide it is advantageous to act through a separate legal entity to provide your product or service,  this can be done through a limited company or a social enterprise.  In this case, the company exists as a separate legal entity and will therefore have specific legal obligations.

Regardless of what you decide, it is important to take advice on what is best for you and your business and most important of all you must inform HMRC as soon as possible after you start trading.