Are you thinking about setting up a business? If so, one of the first decisions you will need to make is that of business structure.
The main business structures are: sole trader, partnership, limited liability company, and limited liability partnership (LLP).
Sole trader – This is the easiest set up, with very little in the way of red tape.
Partnership – This is for 2 or more people coming together to build a business. A partnership agreement should be drawn up to clarify arrangements e.g. ownership and profit split.
Limited company – A company has to be registered at Companies House and is subject to more rules and regulations e.g. filing of annual accounts, filing of a Confirmation Statement. The main advantages of company status are limited liability (i.e. you are not personally responsible for the company’s debts) and tax – with the tax rate applicable to companies due to fall from 19% to 17% over coming years, your overall tax bill may be less than that as a sole trader/partnership.
LLP – This is a hybrid between partnerships and limited companies.
At Whiting and Partners, we can help you to choose the right structure for your start-up.