|Render Under Caesar What Is Due To Caesar|
Setting up a company is different. You have to pay fees to set the company up in the first place, to register it, and also to file annual reports, as well as paying annual corporation tax. It's much more of a hassle than being a sole trader, and there aren't really any tax advantages.
So why set up a company? There are three main reasons:
- Because your customers and clients make you. Once you reach a certain size, plenty of companies won't like doing business with a sole trader. They are used to dealing with companies, and they will insist on it.
- Liability. As a sole trader, you are personally liable for everything the company does, down to your last penny. Most companies are Limited Liability Companies (hence Ltd) which means that if the company goes bust or gets sued - you won't lose your house.
- It's the grown-up thing to do. Once you start to grow and employ people, it makes sense to have a formal vehicle for your operations. Sole trader status is convenient, but it only makes sense for small operations of low complexity.
To see more about the benefits and burdens of setting up a company versus being a sole trader, see this link: http://www.theguardian.com/small-business-network/2013/sep/12/sole-trader-limited-company-freelances
To sign up for our November classroom at Animation Apprentice, follow this link. For more information on finding work and surviving in the animation and visual effects business, read our post on how to find a job in the animation industry, and check out our post about what not to do at a job interview. Also see our post on starting your own small animation business, learn how to create an invoice, and see how we are helping our students find work through our film co-operative Nano Films. Download the free Escape Studios Careers in VFX Handbook. Take a look at how awn.com can help you find a job, and read our piece about how to survive as a freelance animator. Also, find out what Cinesite look for in a student's demo reel, and read our post on setting up your own animation business. Also see our post about freelancers and taxes.