Sole Trader vs Limited Company — Business Structure
Which is right for you — sole trader or limited company?
Spoke 6 — the 5-factor decision framework + how RR advises.
The right structure depends on five interacting factors: 1. **Profit** — under ~£30k → lean sole trader; £50k+ → Ltd case strengthens 2. **Risk/liability** — meaningful business risk → Ltd regardless of tax 3. **Retention** — will you reinvest profit → Ltd 19% retention is real advantage 4. **Pension & family** — big pensions or spouse allowances → Ltd 5. **Exit** — might you sell or pass on → Ltd usually more tax-efficient **Special cases:** Contractors caught *inside* IR35 lose most Ltd advantages. Admin tolerance matters too. The "right" answer changes as your business grows — worth revisiting, not deciding once. **Read the full framework at [rraccountants.uk/which-business-structure-is-right](https://rraccountants.uk/which-business-structure-is-right).**
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