Setting up as a sole trader is the easiest way to get started in business. Some of the most common forms of sole traders are hairdressers, plumbers and photographers.
There are many advantages to operating as a sole trader, it is cheap to set up, there are no formal requirements for board meetings and a sole trader maintains a great degree of privacy regarding the company’s finances. Unlike a company or limited liability partnership, sole traders are personally liable for the debts of the business. This means if the sole trader fails to pay the debts of the business he could risk being made bankrupt.
Whilst there is no limited liability as a sole trader, the degree of flexibility, privacy and lack of formality in setting up the business often out way the lack of protection offered by being a limited company.
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