As an individual, there are several decisions which can affect your personal life and your career – one of these decisions being whether to choose a company or self-employment. At BVS accounting we hope to provide an insight on what path is right for you.

What is a company or self-employment?

 A company is a complex business structure which is a separate legal entity, meaning that it is an organisation recognized by the law as separate from its owners and engages in activities such as producing goods or providing services in order to generate a profit.

However, self-employment is a situation in which an individual works for themselves rather than work for an employer, resulting in the individual generating their own income through their own business endeavours. Clearly, as a result, someone who is self-employed is solely responsible for any administrative tasks related to the business as well as the outcome of the business itself. Essentially, someone who is self-employed is interdependent with their business.

Company vs self-employment

Both companies and self-employment have their respective advantages and disadvantages.

An example of an advantage of a company is the purpose of it being a separate legal entity which then indicates that a company’s liabilities, debts and obligations are not held liable by shareholders or employees. In addition, companies can raise their funds by issuing shares or taking on loans and can be eligible for tax deductions and incentives. Overall, companies have a strong professional image and have an established reputation in the market.

On the other hand, companies are subject to various regulations and tend to advance slowly in terms of making decisions due to the large organisational structure of the company. Shareholders also have limited control over the operation of the company itself.

The leverages of being self-employed include flexibility in their work schedule and workload, the ability to make decisions for the business independently, as well as the ability to pursue their passions and interests as an individual. Also, self-employed individuals have the ability to earn more based on their efforts alone and can be eligible for tax deductions based on their business expenses.

The drawbacks of self-employment are the risk of financial instability as the business’ income may fluctuate quite rapidly and the access to benefits might be quite difficult. Not only this but individuals who are self-employed have an immense workload and are responsible for every aspect of the business, including paperwork and taxes but can also be prevented from expanding as a business in comparison to a company.

Factors to consider when choosing between a company and self-employment

When considering a company or self-employment there are several factors to account for such as the stability and security of both positions, the autonomy the job provides, the ability to grow in income, the benefits that are offered and how either position affects your work-life balance. As an individual, your decisions are ultimately affected by your personal preferences as well as your financial goals for the future.

At BVS Accounting, we aim to provide customised solutions based on your own circumstances and make the decision of choosing a company and self-employment a seamless experience with your best interests at heart, whilst trying to provide you with the best outcome. Additionally, we will be able to aid you through the entire process from the registration of the company or self-employment to the submission of tax returns.

We hope this article has helped to deliver an informed insight as to whether self-employment or a company is the best approach for you.