When starting a small business, one of the first things to be decided is the legal structure used for the business. It can either be a sole trader or limited company or a partnership. Setting up as a sole trader is the most popular legal structure in the UK, with approximately 3.2 million sole proprietorships in 2021. Sole traders accounted for 56% of small businesses in the UK. There were also 2 million limited companies, making it the second most popular legal structure.
There are several different kinds of limited companies available to set up in the UK. Limited companies are the second most popular business structure in the UK, only coming second to sole traders. The type of limited company structure chosen for a business will depend on various factors such as the number of shareholders, the responsibility that the shareholders have and the level of involvement by the public. Each has their own benefits, so each business will need to decide what is the most suitable structure for them.
In a recent study carried out by insurance provider Qdos, it was found that self-employed are exposed to financial risk, as they avoid getting insurance cover. There are numerous reasons for this, from business owners thinking they don’t need it to them still being in the process of considering it.