Starting a video production company: Sole Trader or Private Limited Company?

This was the first choice I had to make when starting my own video production company: the business model. The choice is certainly not unanimous, so you will have to analyse your own situation to make the best choice. Like any decent analysis, it depends on many different factors. I shall list the major factors that will be influenced my decision, specifically for someone wishing to start a video production company.



Are you taking out a loan?

Starting out a production company (typically) involves buying at least some expensive equipment (blog of suggestions for ‘start-up’ equipment coming soon). With starting any new company comes risk, using loaned money to pay for filming equipment comes with additional risk and this should influence your decision to go either Sole Trader or PLC. A PLC allows you to take a limited risk of liability, being a sole trader sees little distinction between you and your business. If you’re cutting it fine with your finances then PLC may be the choice for you. Otherwise if you default on any credit payments for your business as an ST, those debts will follow you wherever you go.


Are you good with filing and paperwork? (Managing Accounts)

 As a PLC you will have to prepare annual/statutory accounts for your company at the end of the financial year (31st March). These reports are sent off to HMRC, Companies House and if you have them at this stage, shareholders. Sole traders are not legally required to file accounts, they keep a record of business expenses and income and have to fill in their tax returns at the end of the tax year - 4th April.


Do you have clients ready to go? Will you earn much starting out?


I hopefully will not speak out of turn and I don’t want to turn this blog into personal financial advice. But I shall detail my thought process and, whether you agree or not, I would always advise you go and research further. However, if you have a pipeline of clients set up, and you are expecting to start earning a more substantial amount; the tax benefits may lean more toward setting up as a limited company. If you are expecting a less substantial amount of business, Sole Trader would likely offer better tax benefits. I have a word count to look out for, so I can’t go into much detail, but I’d suggest looking at this link to start off with:



Prestige/ Professionalism


Maybe the point that almost swayed me, whilst not guaranteeing reliability, the PLC structure gives the impression of a soundly based organisation and may appear more credible. However, whilst I am set up as a sole trader under Pistachio Films, I think the PLC is not so distant on the horizon.


Definitely think this decision through thoroughly, and take advice from any other business owners you may know. Conclusion? You’ve got plenty more to research yet! Go do.