Business names and trading style

There is no longer a requirement to register a trading name. If you intend to trade under your own name, all your business stationery needs to reflect is your name and address and, if relevant, a VAT registration number. You must not use the term “limited” or “plc” unless you have formed a limited company. As a sole trader you are personally liable for the business’s debts but the assets effectively belong to you.

You can, if you wish, trade under any other style provided the name you choose is not offensive or designed so that you pass yourself off as someone else. If you do use a trading name which is not your own name your business stationery must bear the legend “XYZ is a trading name of J Bloggs” or, alternatively, the legend “Proprietor: J Bloggs”.

Trading as a sole trader is more straightforward than using a limited company. There are fewer regulations and any profits belong to the trader once his tax has been paid. He can get relief for losses personally too. A sole trader is not taxed on the benefit of a company car and he has more flexibility in running his business. The disadvantages are that the trader is liable for the business’s debts and some companies do not like to deal with sole traders, because of the possibility of having to treat the soletrader as an employee.