Sole trader or limited company? How to decide

Many freelancers start as sole traders because it is simple. As profits grow, a limited company can be more tax-efficient, but it also brings more admin and responsibility.

When sole trader makes sense

If your profits are modest, you value simplicity and you are not worried about personal liability, staying a sole trader is often the right choice.

When a limited company makes sense

Higher profits, plans to hire or raise investment, and the need to separate business and personal assets all point towards incorporating.

Talk it through first

The numbers depend on your income, your plans and how you take money out of the business. A short conversation usually settles the question.