Sole Trader or Limited Company? A Studio Owner’s Guide

Written by:

Morag Sewell

Customer Success Director

Time to read: 6 minutes

Created on: 03/07/2024

It’s Giving… Legal Decisions

Starting your own pole studio? Whether you’re hanging from silks, spinning on poles, or opening the doors to your dream wellness space—congrats! You’re officially a business owner.

But before you dive headfirst into routines and registrations, there’s one big question to answer:

Should you be a sole trader or set up a limited company?

Don’t worry—this isn’t an HMRC maze. It’s just about finding the best fit for you and your studio’s future. Let’s break it down, StudioPro-style: plain English, no jargon, and a little sass.

What’s the Difference Anyway?

Think of it like this:

Feature	Sole Trader	Limited Company
Legal Identity	You are the business	The business is a separate entity
Liability	You’re personally responsible for debts	You’re protected (limited liability)
Tax	Income Tax on profits	Corporation Tax, plus personal tax on salary/dividends
Admin	Simple and quick	More paperwork, more rules
Perception	Casual but flexible	More ‘official’ and credible

The Sole Trader Studio Vibe

Being a sole trader is like running your studio with the “keep it simple” mantra.

Why it works:

Quick set-up: Register online in minutes with HMRC.
Fewer hoops: No need for formal accounts or directors.
You keep the profits: Minus your taxes, of course.

What to watch:

You’re on the hook: If something goes wrong, your personal assets are at risk.
Scaling gets sticky: Funding, hiring, and partnerships can be harder.
Tax is personal: Your profits are taxed as income—so as you grow, so does your bill.

Meet Lola. She teaches pole classes, runs workshops solo, and wants to grow slowly. She’s happy keeping things lean and low-key—for now. Sole trader? Perfect.

The Limited Company Look

Got big plans? A limited company might be your pole-perfect fit.

Why it works:

Legal protection: Your personal assets are shielded from business debts.
More tax options: A mix of salary and dividends can be more efficient once profits grow.
Credibility boost: Looks more official to banks, clients, and potential partners.

What to watch:

Admin game strong: You’ll need to file annual accounts, register with Companies House, and keep proper records.
Tax complexity: It’s a different tax system—get an accountant or use smart software (hi 👋).
More setup steps: Opening a business bank account, allocating shares, appointing directors—it’s not hard, but it’s more than a quick form.

Meet Jo. She owns one thriving aerial studio and is about to open a second. She’s got team members, a brand identity, and dreams of franchising. Limited company? 100%.

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**Which Structure Fits You Best?**

Here’s a quick gut-check to help you decide:

You might suit sole trader life if…

You’re running solo or with freelancers
You want to test the waters before going full biz-mode
You’re not taking big financial risks

Can You Switch Later? (Absolutely)

Many studio owners start as sole traders and move to a limited company when things start growing.

Here’s a quick overview of how that works:

Register your limited company with Companies House.
Open a business bank account in the new name.
Notify HMRC that your sole trader business has ended
Transfer assets (like equipment or client lists) from the sole trader biz to the company.
Start fresh—new invoices, contracts, and branding (if needed).

💡 It’s a bit of admin—but with the right support (hello again 👋), it doesn’t have to be stressful.

Sole Trader – Legal Implications

**You are the business**

Legally, there’s no separation between you and your studio.
All debts, contracts, and liabilities fall on you personally.
If your business goes into debt or faces legal action, your personal assets (e.g. your home, car, savings) could be at risk.

Simplicity in structure

You don’t need to register with Companies House—just inform HMRC you’re self-employed.
There’s no requirement for formal accounts or annual returns to Companies House.
You can use your own name or trade under a business name, but it won’t be protected like a company name.

Less privacy

While you don’t have to publish detailed accounts, your trading name isn’t protected and others could use it unless you trademark it.
You’re personally liable for all legal contracts—even if the business fails.

Limited Company – Legal Implications

Separate legal entity

The company is a separate “person” in law.
If the company runs into financial trouble, your personal liability is limited to the value of your shares or guarantees (unless you’ve personally guaranteed something).

Formal responsibilities

You must register with Companies House and adhere to the Companies Act 2006.
Directors have legal duties, including:
- Keeping accurate records
- Filing annual accounts and confirmation statements
- Acting in the best interest of the company (fiduciary duties)

Public accountability

Your business’s finances and structure are public record.
Annual accounts and confirmation statements are available for anyone to view online (clients, competitors, potential investors).

Company name protection

Your business name is protected and registered at Companies House—no one else can use it in the UK.

Contractual obligations

Contracts (leases, supplier agreements, employment contracts) are entered into by the company—not you personally.
If the company fails, the contracts remain with it unless you’ve given a personal guarantee.

Other Legal Considerations for Both

Data protection

If you collect or store client information (like emails or health forms), you must comply with UK GDPR laws—no matter your business structure.

Insurance

Sole traders and limited companies alike should hold public liability and professional indemnity insurance.
Employers’ liability insurance is legally required if you hire anyone.

Licensing & Health/Safety

Depending on your studio setup, local authority licenses and compliance with health and safety legislation may apply.

In Summary

Legal Area	Sole Trader	Limited Company
Legal identity	You are the business	Separate legal entity
Personal liability	Unlimited	Limited (usually)
Regulation	Light	Heavily regulated
Director responsibilities	N/A	Legally bound under Companies Act
Public records	Minimal	Annual accounts publicly filed
Business name protection	No	Yes
Contract signatory	You	The company

It’s All About You

There’s no “right” answer—only what works best for you.
Whether you’re vibing with the low-lift sole trader route or going big and bold with a limited company, your structure should reflect:

Your goals
Your financial comfort zone
Your growth plans

The good news? You don’t have to figure it out alone. From finance to operations, StudioPro is designed to help you spend less time on admin—and more time doing what you actually love.

Time to Grow with StudioPro

Ready to take the next step in your studio journey?
Whether you’re sole trading or limited-comp-ing, StudioPro helps you run the back end of your business like a pro (without needing an MBA).

🎯 Start your free trial today and find your perfect business fit—no spreadsheets required.

👉 Try StudioPro now