The FCA authorises businesses of all shapes — sole traders, partnerships and limited companies alike. Your legal structure doesn't decide whether you need authorisation; the activity you carry on does that. But it does shape how the application looks, who is named on it, and what happens if you restructure down the line.
You can apply either way
If you're a sole trader brokering finance as part of your business — say a small car dealer or an independent retailer — you can apply for limited permission in your own name. You don't need to incorporate first. Equally, if you trade through a limited company, the company is the applicant. The same permission and the same FCA application fee of £550 apply to both.
The responsible person: SMF29
Every authorised firm needs someone accountable under the Senior Managers regime. For limited permission firms this is the SMF29 limited scope function. How this plays out differs slightly by structure. In a limited company, a director is typically named as the SMF29 holder. As a sole trader, you are the responsible person — and notably, a sole trader with no employees may not need to appoint anyone to the function at all, because there's no one to manage but yourself. The fit-and-proper assessment — covering honesty, competence and financial soundness — applies to the named individual whichever structure you use.
What differs in the application
The core of a limited permission application — the regulatory business plan, the compliance policies, the financial information — is broadly the same for both structures. The differences are mostly in the detail: a company application captures directors, persons of significant control and the corporate structure; a sole trader application centres on the individual. Financial information is presented differently too — company accounts versus a sole trader's figures — though the substance the FCA wants (that the business is viable and the applicant financially sound) is the same.
What happens if you incorporate later
This is the part worth thinking about before you apply. FCA authorisation attaches to the legal entity that holds it. If you're authorised as a sole trader and later incorporate — moving the business into a new limited company — the company is a different legal person, and the sole trader's authorisation does not simply transfer to it. The new company generally needs its own authorisation, and there's an FCA change-of-legal-status process and fee involved.
In practice, that means if you already know you intend to incorporate, applying as the limited company from the outset can save you doing the authorisation work twice. If you're settled as a sole trader, there's no need to incorporate purely for FCA purposes — sole trader authorisation is entirely normal. The point is simply to apply as the structure you expect to keep.
Which should you choose?
This isn't really an FCA decision — it's a business one, driven by tax, liability and how you want to operate, and you should take your own accounting and legal advice on it. From the authorisation angle, the only practical steers are these: apply as the entity you intend to keep, because changing structure later means re-authorising; and if you're a sole trader with no staff, the SMF29 picture is simpler for you. Beyond that, both routes lead to the same limited permission and the same ability to offer customer finance lawfully.