How to choose a business structure

_{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.}

If you wish to discuss this further, please contact your local office or usual Whiting & Partners contact. Alternatively, we have a number of start-up seminars for new businesses looking for advice on business structure.  For more information please visit our events page.

Disclaimer - All information in this post was correct at time of writing.