Both structures come with their own pros & challenges, so the choice depends on factors like size, growth expectations, and risk tolerance. The sole trader has unlimited liability, which means personal assets can be used to cover business debts whereas the limited company is a separate legal entity from its owners (shareholders) so they have limited liability, meaning they are only responsible for business debts up to the amount they invested. The accounting requirements for sole traders is a little simpler while the limited company is more complex but offers potentially more tax-efficient options for extracting profit There is no audit requirement for sole traders whereas a Limited Company (certainly larger ones) may need to undergo an audit if they exceed certain thresholds (e.g., turnover, assets, or number of employees). Small companies are exempt from audits unless shareholders request one. And a limited company must file a confirmation statement each year with Companies House ...