A freelance career in the creative arts
A freelance career in the creative arts

Start this free course now. Just create an account and sign in. Enrol and complete the course for a free statement of participation or digital badge if available.

1 Options for structuring your business

When setting up your business you need to decide which legal structure you will operate in. You’ll explore some of the more commonly used structures in detail throughout this week.

A collection of shapes connected by lines and arrows. A hand is placing a shape into position.

Watch this short video from HM Revenue & Customs (HMRC), the UK Government department responsible for collecting taxes. It explains the main legal business structures available to you.

Download this video clip.Video player: Video 2
Copy this transcript to the clipboard
Print this transcript
Show transcript|Hide transcript
Video 2
Interactive feature not available in single page view (see it in standard view).

Which of the structures sound most relevant to you at this stage? For most, it will probably be sole trader, and you’ll learn more about that and limited companies later in the week. Partnerships are more complex and beyond the scope of this course. If you want to explore the legal structures in more detail the Further research section at the end of this week provides a useful starting point.

It is important to note that you are recommended to register your business as soon as you can after you start trading. Also, you’ll find that most of your freelance clients, particularly if you are offering a service of some kind, will require proof that you are registered before they are able to pay you.

Activity 1 What questions do you have?

Timing: Allow about 5 minutes

Throughout the rest of this week you will find out more about the different business structures you can choose between. At this stage, though, pause for a moment to consider whether you have any key questions about this aspect of your business. For example, what information do you need to know before you can make a decision? Make a note of your questions in the box below.

To use this interactive functionality a free OU account is required. Sign in or register.
Interactive feature not available in single page view (see it in standard view).


Your questions might have included:

  • Why is it important to make a decision about this?
  • What do I need to know about in order to decide on the right structure?
  • What are the options open to me?
  • Who do I need to register with?

Giving some thought to this now, even if your questions are vague at this point, will allow you to more easily identify the information you need as you work through this week. This can be a complex issue, but there is support and advice available to help you make your decision. If you don’t find the answers you need within this course, go back to Week 3 and look at some of the online resources listed there.

In the next section, you’ll start to look at individual structures in more detail, starting with the most common choice for freelancers in the UK – the ‘sole trader’ business structure.

Take your learning further

Making the decision to study can be a big step, which is why you'll want a trusted University. The Open University has 50 years’ experience delivering flexible learning and 170,000 students are studying with us right now. Take a look at all Open University courses.

If you are new to University-level study, we offer two introductory routes to our qualifications. You could either choose to start with an Access module, or a module which allows you to count your previous learning towards an Open University qualification. Read our guide on Where to take your learning next for more information.

Not ready for formal University study? Then browse over 1000 free courses on OpenLearn and sign up to our newsletter to hear about new free courses as they are released.

Every year, thousands of students decide to study with The Open University. With over 120 qualifications, we’ve got the right course for you.

Request an Open University prospectus371