01: Introduction
The simplest way to trade is as a sole trader. In law, the business is inseparable from its owner. The advantages of starting a business as a sole trader are:
- Anyone can set up in business as a sole trader. Few legal formalities are involved. The tax treatment is generally simpler compared to the position of a limited company director/shareholder.
- National insurance contributions (NICs) are generally lower than the combined employer/employee NICs applicable to a director of a company where salary/bonus is drawn.
- Control and decision-making does not need to be shared.
- All the profits belong to the owner.
- Profitability and other financial information remains confidential.
