Sole Traders

Sole Traders

There are a number of ways that trading can be conducted. One of the most common terms is “limited company”.  This term is an abbreviation for “Limited Liability Company” and is usually designated as “Ltd” after a company’s name.

The history of this is a good starting point. The first limited company was in 1855 although there had been similar attempts to introduce the concept since the 1600’s. The act was introduced then by the government to encourage entrepreneurs by limiting the amount of money that could be personally lost in a trading venture. Before this act all traders were sole traders or a collection of people working together which was, and is, called a partnership. If the business failed all the assets, personal and business could be seized. This was seen as detrimental to the growth of the UK economy as traders were not able to quantify their risk and would not invest or pursue new opportunities.

The act allowed traders to join together to form a trading company and agree the maximum amount of money they would introduce into the venture. Their liability was limited to the amount introduced: a Limited Liability Company. The traders introducing the funding were called members and the amount of the funds introduced determined their share of the profits. The members, now more commonly known as shareholders, would appoint a person or persons to run the company. These people are now more commonly known as Directors.

The act was structured in such a fashion that a limited company is classified as having an actual existence – a “man of straw”.

The options of sole trader, partnerships and limited companies (although there became numerous types of limited companies) remained for approximately 150 years but with ever  increasing compliance and tax legislation for both limited companies and their Directors.

In 2000 it was recognised that the legislation and regulations for limited companies and the continued open ended risk for sole traders and partnerships was again a barrier to commerce and Limited Liability Partnerships (LLP’s) were introduced by the Government.  The LLP’s are a hybrid between the reduction of risk and some of the formalities required of a Limited Company and some of the flexibilities available to sole trader/partnerships with the protection of ‘limited liability’.

We can assist Sole Traders with the following services:

Please contact us to discuss your requirements.

 

Personal

Every person who receives untaxed income is responsible for declaring their income to HM Revenue & Customs. The government has now declared its intention to prepare tax returns on an individual’s behalf. The data will be calculated on the data collected by HM Revenue & Customs. We strongly advise that any tax return submitted or created by HM Revenue and Customs is very carefully reviewed.

We can provide the following services:

Please contact us to discuss your requirements.

Contact us

10 Town Quay Wharf,
Abbey Road
Barking
Essex
IG11 7BZ

0208 591 2391
accountants@garrodbeckett.co.uk

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