Guidance On Starting Up Your Own Small Business

People who start up their own business generally have a good business idea and the will to carry it through. But they are not, necessarily, financial or legal experts so here are some fundamental points that you will need to be aware of when running your own business. But don't worry that these issues might be beyond your understanding because they will not influence the success of your business; that is more dependent on your idea and your determination. But they are issues that you need to be aware of even if you are employing an expert to handle the nitty-gritty.

There are four different ways of setting up a business in the UK. These are sole trader, a partnership, a limited company or a limited liability partnership. It is important to choose the most appropriate structure for your purposes as here aretax and national insurance implications to each. The simplest way to run your own business is as a sole trader and many people stat out in business this way, especially if you require no premises and no permanent employees as there is minimal administrative requirements. However, all financial liability is yours personally so you would be liable for all debts and assets such as your home would have to be used to pay your debts so think carefully whether this type of business would suit you. If you are a consultant or contractor with no premises and no staff and are, therefore, unlikely to incur debts then you may benefit from the simplicity of this type of business.

If you are working in partnership with one or more other people then the business is automatically a partnership and requires no formalcontract. The advantages are that a partnership is often seen as a more professional type of business to potential clients than that of a sole trader and yet have the benefits of the same simple admin requirements. The disadvantage, of course, is when disputes arise between partners.

A Limited Liability Partnership enables partners to limit their personal liability without having to set up a limited company and are a relatively recent option.


Trading as a Limited Company mans that from financial and legal aspects you are a separate entity from your business so the company can own premises and incur debts without you personally being liable for them, which is the distinct advantage of a limited company. There are also tax and national insurance benefits when trading as a limited company providing the structure is appropriately set up and the added advantage of being able to sell a business on for a profit. The disadvantages are the legal requirements of a limited company in that information such as Directors' names and annual accounts have to be made available to the public through Companies House.

Limited Company Procedures

New companies can be incorporated relatively simply and inexpensively by preparing the relevant documents for Companies House and notifying HM Revenue and Customs (HMRC). The company then needs submit accounts and tax information to HMRC within 12 months of the end of their accounting period. Once turnover is higher than the current Value Added Tax (VAT) threshold the business will also need to register for VAT and charge and record VAT on products or services. Directors and other employees will also need to be paid through a formal payroll system.

Chartered accountants in north london can provide the relevant assistance when setting up a limited company and many can help you to budget easily for their charges by offering a fixed fee accounting package that can be paid for in monthly instalments. Chartered accountants can also offer tax advice to limited companies and other small businesses to minimise your tax liabilities.