Start Sharp

Business Startup Toolkit

Your step-by-step guide to setting up as a sole trader or limited company — tick each step off as you go.

2026/27
First decision: sole trader or limited company?

Sole trader

Simplest & quickest to set up
  • You and the business are the same legal entity
  • You keep all profits after tax
  • Unlimited liability — personally responsible for debts
  • Register with HMRC for Self Assessment
  • Pay Income Tax + Class 2/4 NIC on profits
  • Less admin and no public filing of accounts
  • Often better for lower profits / getting started

Limited company

More setup and ongoing admin
  • A separate legal entity from you
  • Take money as salary and/or dividends
  • Limited liability — personal assets generally protected
  • Register at Companies House + for Corporation Tax
  • Company pays Corporation Tax; you pay tax personally
  • Accounts & confirmation statement are public record
  • Often more tax-efficient at higher profits
Not sure? This is exactly the kind of decision to talk through with an accountant — it affects your tax, admin and liability.
Sole trader setup checklist
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Limited company setup checklist
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Business setup essentials
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One-off startup costs
Month one — simple cashflow
£
£
Total startup costs£0
Cash needed to launch
£0
Startup costs + any month-one shortfall
Total startup costs£0
Month-one positionIncome less running costs£0
Cash needed to launch£0
A negative month-one position means you'll need cash reserves to cover the shortfall before the business pays for itself.

General guidance based on GOV.UK, not advice. Rules and fees change — confirm at gov.uk.
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