FFS008:Sole Trader v Limited Company v Partnership - How to Choose

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This has to be one of the most common questions I get from business people. My response was usually “discuss this with your accountant” But even when they did, many still had questions or couldn’t decide.

I couldn’t figure out why, your accountant is a great place to start. Then I began to see a pattern. The accountants always answered the question from a financial/tax perspective. Which is great, that is what they are meant to do. But the decision has other implications not just to do with tax.

Some people felt they didn’t have a full enough understanding to decide. Some felt they had enough of an understanding but the professional advice went against their gut feeling. While others had other questions to ask but were reluctant to ask them because they came from a non-financial or personal perspective that they didn’t feel comfortable to bring up in an accounting or tax conversation.

Today I will give you a brief overview of the differences between the different structures from a legal standpoint.

Then I will give you a little quiz and the answers of course to help you choose. And where appropriate I will give you my take on it.

This is definitely a pen and paper episode, but if you are in the car, at the gym or someplace else where you can’t take notes. Don’t fear I have a gift for you.

When you can; go to financialgymforbusiness.com/soletraderyesorno and you will be able to download a simple matrix with the questions and the best options based on your answers.

You will also hear
· How your ability to pay your bills on time is an indication of what type of company to set up
· Why your credit rating could matter whatever entity you choose
· Some sticky points about going into a Legal Partnership
· The role your personal preference must play in any decision you make

Show Links and Resources
Sole Trader v Limited v Partnership – How to Choose – Quick Tip Guide