Setting up a company?

brokenHaiku

I'm starting to get itchy feet on the job front and wanting to see what else is out there. What are the advantages / disadvantages of setting up my own company, say if I was going to do some contract work? Can anyone point me in the direction of anything that can bring me up to speed?

Thanks!

seaweasel

Get in touch with your local enterprise agency. Scottish Enterprise run Business Gateway and I'd imagine that most other areas of the country will have something similar.

If you're doing any freelance work then legally you have to register as some sort of business entity so that your income can be assessed for tax and NI.

Do you actually want to start a limited company or just become a sole trader? The former is more work to start up and maintain, however you have the advantage of removing most personal liability for debt etc. See the Companies House website for more details. Alternatively, you can just register with HMRC as a sole trader, which is cheaper and easier, however you have more personal liability than if you're a director of a company.

Astaroth

If you are doing contracting the advantages of forming a Ltd company are around reducing your tax liability and your over all liability - you and the company are 2 seperate entities and what is owned by one cannot be touched by the other so if you were sued for millions as a Ltd company they cannot touch your home etc as it is owned by your the person not you the company (a sole trader the two are one and the same). The flip side of cause is that there is additional paperwork etc associated with a limited company.