Business Structures

Q: I have started a new business but I am not sure whether I should have a Limited Company.

A: There are three common types of business structure.

Sole trader

This is the simplest form of business since it can be established without legal formality. However, the business of a sole trader is not distinguished from the proprietor's personal affairs.

Partnership

A partnership is similar in nature to a sole trader but because more people are involved it is advisable to draw up a written agreement and for all partners to be aware of the terms of the partnership. Again the business and personal affairs of the partners are not legally separate.

Company

The business affairs are separate from the personal affairs of the owners, but there are legal regulations to comply with.

The appropriate structure will depend on a number of factors, including consideration of taxation implications, the legal entity, ownership and liability.

Q: I have decided that I want a Limited Company. How do I get one and how long will it take?

A: It is possible to buy an off the shelf company or form a tailor-made company via an accountant, solicitor or formation agent. Company formations generally take 5 working days but it is possible to pay extra for a same day or 24 hour registration service. Some formation agents offer on line registration services.

More information is available at Companies House where guidance booklets can be downloaded for free.

Alternatively if you would like specific advice and assistance in forming your company please email us.