In the UK, when starting your own small company you have a choice between forming a Limited Company (known as Company Name Ltd.) which is a separate legal entity (I assume very similar to the LLC in the US) or you can set up as a self-employed person (either as a sole trader or in a partnership) where the company is actually just yourself earning some money under a trading name.
When I set up Reiver Games back in July 2006, after getting some advice from Business Link, a now defunct government scheme to give free advice to new businesses, I chose the sole trader route - technically, Reiver Games was: Jackson Pope trading as Reiver Games.
Since at the time I was only setting up the business to try and sell 100 copies of Border Reivers that I was going to lovingly craft by hand, I wanted to keep things as cheap as possible. Setting up a limited company required paying someone to incorporate it, and then paying every year for employees liability insurance and to get an accountant to audit your books. All costs I could do without.
Setting up as a sole trader was much easier: open some bank accounts, create a website and tell HMRC (our equivalent of the IRS) that I was now self-employed as well as an employee and job done. As a self-employed person I would also have to start filling in a tax return every year. In the UK if you are just an ordinary wage-slave, paying taxes straight out of your pay cheque every month (PAYE) you don't need to file a tax return, but self-employed people do.
We have to file our tax returns by the end of January the year after the tax year we're filing for. So at the end of this month I have to file a tax return for the tax year from 6th April 2011 to the 5th April 2012. Reiver Games ceased trading in July 2011 and I finally closed all the bank accounts in November 2011, so this is the last time I'll have to file a tax return I hope.
While I was running Reiver Games (especially during the period when I was doing it full-time) I tried to keep on top of doing my books as I went along, then filing a tax return wasn't too onerous: read some numbers of the annual totals and that was pretty much it. Once I went back to work and Reiver Games was clearly going down the pan it was a bit harder to summon the enthusiasm for staying on top of my books, so filing a tax return turned into frantically catching up on the books, then filing a tax return at the last possible minute. It was like that last January and again this year. I've been doing it during the evenings over the last week or two after The Baby had gone to bed and finally finished and submitted it last night. Theoretically, HMRC will notice I've ceased being self-employed and remove the need to fill in a tax return, though they might need some prodding...
Needless to say, on top of the books, I've got pretty much nothing done on Codename: Vacuum the last couple of weeks, but I've still been having lots of ideas to try out. Now these damn books and tax return are out of the way I'll have to give them a whirl.