If you’re thinking of starting a business, you first need to come up with a realistic idea you can turn into a product or service.
Setting up your own business might be the most important decision of your life, which is why it is essential to take all the pros and cons into consideration. First of all, you need to decide what type of business you are about to start, which legal structure is right for your business before you register for tax and start trading.
It’s important to understand the different risks and benefits before you choose – whether you set up as a sole trader, limited company or partnership affects:
- The amount of financial risk you’re taking on
- The way you’ll need to pay tax, and report to HM Revenue and Customs (HMRC), and Companies House for limited companies and some types of partnership
- How much control you have over how your business is run