how do you avoid liability for debts...

Deals_2

is it better to be self employed sole trader or is it to be limited company? thanks in advance.

CIS

As a sole trader you are personally responsible, as a limited company it is the company which is responsible (except in some rare cases were the directors can be held liable)

CLAPTON

CIS is quite right, which is why banks won't lend to small limited companies without a personal guarentee from the directors

Pee

Agree with the above. Anyone lending you money including any sharp wholesalers or suppliers will require a directors guarantee, so the good news is, wriggling out of debts and leaving some other company in a mess is not that easy... although if you have nothing, the directors guarantee is worth nothing and the supplier might still go under.