Concerned about legal risk of going sole trader

161 Posts

I have been in business almost 18 year now. Just a small business. I am kind of starting from scratch with a new business. The last few years has been terrible for me and I am now at the lowest point I have been in many years. I am normally a very positive glass half full type of person. Nothing seems to be going my way.
Anyway, I started a new business. I have always had businesses that were limited company so I started this as a limited company. I have never traded as a sole trader. I started an online learning and tutoring support business recently. It's a slow start and its not making any money, but it has potential and I am kind of exciting about growing it. But I stress I do not need it grow big, just give me a regular income and pay the people who work with me.
My website has a forum and it does newsletter and email marketing. I want to go sole trader as it would simplify life for me and I am tired of the admin and costs associated with a limited company. However, I am almost paranoid about going sole trader from a legal risk point of view.
I had always assumed an e-learning would be a low risk business to run as a sole trader. However, nowadays with laws for everything and almost American style suing culture, running a forum community and a learning newsletter makes me think it may be a risk. Plus I am dealing with the teenage market. Is it a risk?
Am I being paranoid and over cautious. Please advise if you can. It would help me a lot as this is stressing out a lot. Being a sole trader would be huge benefit for me. I no longer care about the tax advantages as I don't see this growing big. And should that situation come I can go back to limited company at that point.
But the legal thing is making me worry too much.
Thank you.
Anyway, I started a new business. I have always had businesses that were limited company so I started this as a limited company. I have never traded as a sole trader. I started an online learning and tutoring support business recently. It's a slow start and its not making any money, but it has potential and I am kind of exciting about growing it. But I stress I do not need it grow big, just give me a regular income and pay the people who work with me.
My website has a forum and it does newsletter and email marketing. I want to go sole trader as it would simplify life for me and I am tired of the admin and costs associated with a limited company. However, I am almost paranoid about going sole trader from a legal risk point of view.
I had always assumed an e-learning would be a low risk business to run as a sole trader. However, nowadays with laws for everything and almost American style suing culture, running a forum community and a learning newsletter makes me think it may be a risk. Plus I am dealing with the teenage market. Is it a risk?
Am I being paranoid and over cautious. Please advise if you can. It would help me a lot as this is stressing out a lot. Being a sole trader would be huge benefit for me. I no longer care about the tax advantages as I don't see this growing big. And should that situation come I can go back to limited company at that point.
But the legal thing is making me worry too much.
Thank you.
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Replies
If anyone can put my mind at ease I will be grateful to you. Thanks.
Limited companies are not the get out of jail free card that many think they are, directors can incur a personal liability which is why D&O Insurance exists.
as a very small business it makes sense to be self employed the tax benefits of limited only really kick in over about £35k profit.
https://www.gov.uk/tell-hmrc-changed-business-details/change-to-your-business
There's also some info here - https://www.highspeedtraining.co.uk/hub/how-to-become-a-private-tutor/
And here - https://www.thetutorwebsite.co.uk/articles/207,how-to-set-up-an-online-tutoring-business.html
Hope this is helpful.
The problem is that a claimant doesn't need to have a good case to sue you and whilst you may ultimately win it sucks up vast amounts of time and potentially costs. The OP doesn't really give much detail about the service offered but on the basis its around education then the obvious route of suing is around little Johnny not doing well enough on his A Levels after following the site's advice and now rather than being a brain surgeon he'll be a bin man and they want compensation for the loss of future earnings.
https://www.city-journal.org/html/fail-me-i-sue-12368.html
Parents engaged lawyer to deal with English teacher after kid failed their English exam, the school ultimately increased her grade rather than it end up in court.
Unfortunately its not hearsay and conjecture, everywhere is becoming more litigious and in particular in the US where silly monies can be involved (like $1m for a school cutting a pupils hair without parental consent https://www.theguardian.com/us-news/2021/sep/20/lawsuit-michigan-school-teacher-cut-girls-hair)