There are different ways to start your business and in most cases you are not required to use a particular business structure. Some examples are:
- Sole traders – working as a sole trader means all profits are earned by you and kept by you as an individual. This is often the simplest structure;
- Partnership - if you have a "business partner" the law may treat you as being a partnership, if that happens you will be jointly liable for all the business's debts and obligations even if incurred by your partner. Of course, you could intentionally decide to set up as a partnership, but if you do make sure you put in place a partnership agreement to avoid disputes later on;
- Limited liability company - whether you decide to use a limited liability company will depend upon your circumstances. There are a lot of factors to consider such as the increased burden of having to publicly file information and the two-tier tax treatment: one tax for profits earned by the company (corporation tax) and a further tax on passing those profits to the shareholders. On the other hand you can limit your personal liability by using a company;
- Limited liability partnership – this is a hybrid of a partnership and a company.
We can guide you through this decision process so that you can be confident you have selected the right structure for you.