Home – New Forums Money matters What’s the difference? Reply To: What’s the difference?

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I have heard of some businesses/ government departments requiring you to be a company over a sole trader, I believe this has to do with various items such as insurance issues, their company/ departments policy.

I have experienced the same thing with gov departments. With out knowing your particular circumstances its pretty difficult to know if you would be better off or not.

The major differences would be:

Sole Trader – you would have to register your business name
Company – you could just use the name of the company

Sole Trader – all the profit is taxed under your name.
Company – you can have shareholders other then yourself, so can transfer some of the income to others, although the company would need to pay the company tax rate (30%) on the profits first.

Sole Trader – you have the ability to offset losses (assuming you meet certain non commercial rules) against other income
Company – any losses get left in the company until the company makes a profit.

I’m sure there are more, but there the major ones I can think of at the moment.