Sole Trader or Partnership for Counselling Services

If you are looking to set up a community or welfare counselling service, there are some factors to consider before you establish the business. Choosing a business structure is one of the biggest decisions you will make in the running of your business. Therefore, it is important that you are aware of all the business structures available to you before making this decision. Non-employing enterprises (sole traders or partnerships) account for over 70% of all enterprises in the industry although this has declined marginally in the past five years. This article will explore both types of non-employing enterprises.

Counselling Services as a Sole Trader

One option available to your counselling business is that of a sole trader, which is by far and away the easiest structure to set-up and run day-to-day. This structure means you have access to all profits and complete control of the business at all times.

Many business owners find that they run a business best when they can choose exactly how much or how little capital is required at any given time. Therefore, because a sole trader is indistinguishable from the individual owner in the eyes of the law, this business structure will allow you to spend your profits in any way that you desire.

However, it must be remembered that if you choose a sole trader business structure for your counselling service, you will incur personal liability for any dealing you enter into. Consequently, if you sign a deal that proves to be disastrous for your business, you will be required to pay for it from your personal finances. Some business owners find this pressure to be too much to bear. Ultimately, it will be up to you to decide if a sole trader business structure is best for your counselling service.

Setting up a Counselling Partnership

Another business structure available to your counselling service is that of a partnership. Partnerships require you to go into business with another person or other persons in which you share liability for the business.

The advantages of a partnership business structure are that it is easy to set-up. Also, it will allow you to combine your resources and expertise with that of other counsellors, thereby providing you with a significant advantage over someone working as a sole trader. Finally, there is much greater flexibility within a partnership than other business structures involving two or more people, as profits and investments can be split subject to the agreement of all partners.

However, when you enter into a partnership agreement, all partners agree to be financially liable for the actions of each other partner within the course of conducting business. Consequently, it is imperative that you only enter into a partnership with people that you trust to have your best interests at heart.

Key Takeaways

The advocacy and counselling services industry is booming. If you are looking to start your counselling service or expand your already existing counselling service, you should begin to consider which business structure will work best for you. A partnership business structure will allow you to pool resources with multiple counsellors. Alternatively, running a sole trader business will give your complete control over your counselling business. If you have any questions about setting up a new business, our business solicitors can assist you.