How to verify sole trader and limited company sellers on a UK marketplace: what each can prove, which checks fit and how to design one flow.
Most UK marketplaces have both kinds of seller. Some trade through a limited company with a registered number and named directors. Many more are sole traders: one person running a business in their own name, perhaps with a trading name on top. A verification flow designed only for companies leaves sole traders stuck. A flow designed only for individuals misses what a company record can tell you.
This post looks at the difference between the two, what each type of seller can actually prove, and how to build one onboarding flow that handles both without asking people for things they cannot provide.
The legal difference drives everything else.
A limited company is a separate legal entity. It is registered at Companies House, has a company number, a registered office, at least one director and, in most cases, people with significant control. Those records are public, so a marketplace can check them.
A sole trader is not a separate entity. GOV.UK explains that sole trader businesses have "unlimited liability", meaning owners are personally responsible for all of the debts of the business. The business and the person are, in effect, the same.
There is also no public register of sole traders to check against. GOV.UK notes that a sole trader can start trading straight away without registering, but must register for Self Assessment if they earn more than £1,000 in a tax year. That registration is with HMRC and is not something a marketplace can look up.
So for a company seller, you verify a company and the people behind it. For a sole trader, you verify the person, and then decide what else you need to know about how they trade.
For a company, the checks build in layers:
TrustVerify's UK business check, POST /api/v1/kyb/verify, covers Companies House records for GB companies and returns a status of passed, review, failed or unverified. The UK KYB guide walks through the response. Our post on how to verify a UK company seller goes into each step. [Planned URL, live on publication.]
Since November 2025, Companies House has been introducing identity verification for directors and people with significant control. That helps, but it does not replace your own check that the person in front of you is the director they claim to be.
With no register to check, sole trader verification centres on the individual.
Identity. An identity document check with selfie-to-document matching confirms that the document looks genuine, extracts the details and checks that the person's face matches the document photo. Our KYC solution page explains how it works.
Screening. Sanctions and PEP screening on the individual. For a sole trader, the person is the business, so this is the main screening check.
Contact details. Email and phone checks help confirm the contact details are real and not disposable. See email and phone checks.
Trading details. This is where judgement comes in. You might ask for a trading name, a business address and, where relevant, a VAT number.
A sole trader whose taxable turnover passes the VAT threshold, currently £90,000, must register for VAT. If a sole trader gives you a VAT number, it is worth checking. HMRC provides a service to check a UK VAT number, which confirms whether the number is valid and the name and address it is registered to.
Be clear about what that does and does not prove. A valid VAT number shows the business is registered for VAT. Many sole traders are below the threshold and will not have one, which is perfectly normal. Do not treat a missing VAT number as a risk signal on its own.
TrustVerify does not run VAT number checks. If you want to check VAT numbers, use HMRC's service directly. Our post on VAT number checks for marketplace sellers explains how. [Planned URL, live on publication.]
Sole traders often use a trading name that is different from their own. That is legitimate, but it creates a gap: buyers see "Smith's Vintage Furniture" while your records show "Jane Smith". Record both, show buyers what they need to know under consumer law, and make sure payouts go to an account in the verified person's name or a business account you can link to them.
The best onboarding flows ask one question early: "Do you sell as an individual or sole trader, or through a registered company?" Everything else follows from the answer.
Sole trader branch:
Company branch:
Both branches end the same way: a decision of approve, review or reject, with the evidence stored. That consistency matters when someone later asks how sellers are verified.
Sellers who pick the wrong type. Some people run a limited company but think of themselves as sole traders, or the reverse. If a "sole trader" gives a company number, or a "company" cannot provide one, route them to the right branch rather than failing them.
Changing status. A sole trader may incorporate later. Give them a way to update their seller type, and run the company checks when they do. Keep the earlier identity check on file rather than repeating it unnecessarily.
Partnerships and others. Partnerships, LLPs and charities do not fit neatly into either branch. LLPs are registered at Companies House and can follow a version of the company branch. Ordinary partnerships are not, and usually need each partner verified as an individual. Decide how you will handle these before they arrive.
Asking for too much. It is tempting to ask sole traders for business bank statements or proof of trading. Ask only for what you will actually use to make a decision. Extra documents slow onboarding and give you more personal data to look after.
Not every seller needs the same depth of check. A person selling a few household items now and then is different from a sole trader with a high monthly turnover. Many marketplaces set thresholds: light checks to start, fuller checks before payouts rise above a certain level. That keeps onboarding quick for small sellers while still covering the risk where it is greatest.
Whatever you decide, write it down. A short policy that says which checks apply to which sellers, and why, is far easier to explain than a flow that grew one rule at a time.
See how one seller verification flow can handle individuals and companies. Explore TrustVerify KYB.
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