I have been a sole trader for many years. Would it be better to run my business as a limited company?

6 November 2025 | Business Formations and Structures |

Perhaps, but not necessarily. You should speak with your accountant about whether or not tax savings could be made by incorporating your business (making it a limited company).

Aside from the potential financial benefits, a limited company has one key advantage over a sole trader set-up: because a limited company is its own legal entity, separate from you as its owner, your liability for the things the company does or doesn’t do is limited to the amount you have invested in it. This may be more important in some lines of work than in others, so it would be worth talking this through with one of our company formation solicitors to see if limiting your liability would be advantageous. They will also be able to advise you on the practicalities of running a limited company – the need for more extensive accountancy, for example – and on the way in which your business could be structured in order to fit with your longer-term plans.

Ultimately, there are pros and cons to each type of business structure and it’s really about finding the one that is the best fit for you, your actual and potential customers, and your objectives.