Limited Company Or Self-Employment

Home / Limited Company Or Self-Employment

Self-Employment

For

  • Simple – easy to administer
  • Flexible – easy to manage
  • “Cheap” – simplest form of business, with minimum regulation and administration

Against

  • Least impressive “status” in business community
  • Not Tax/NIC efficient
  • No protection from liability

*Self-employment includes partnerships which are really, effectively, treated as a group of self-employed people working together.

Limited Company

For

  • Better “status” in business community
  • Tax/NIC efficient
  • Limitation of liability
  • Better in the long term for financial and tax planning
  • Easier to involve other people and investors

Against

  • More complicated administration
  • More expensive to run
  • More constraints on administration
  • More legislation to worry about
  • Less flexible cash movement

There is a compromise called a Limited Liability Partnership (LLP) which may suit some situations.

Companies House offer guidance on the use of sensitive words and expressions when dealing with incorporation and names.