When starting your business from home, it can be very difficult to find the time to properly research all of the options available to you, especially if you are juggling your start up with looking after the kids too. One of the main decisions you have to make that requires in-depth research is which legal or accounting structure you would like to use – you may consider setting up as a sole trader, or in a partnership. Your other option is to set up as a limited company.
A limited company can be identified by spotting companies with the abbreviation Ltd after its name, and differs from sole traders mainly due to the case of liability. Whereas a sole trader or partner may be held personally responsible for outstanding debts or other legal action, with a limited company you are not. Profits and losses belong to the company, and it can continue trading regardless of death or otherwise of shareholders or those who run the business.