When starting a business there are four common structures. These are private limited companies, sole traders, partnerships or limited liability partnerships.

Private Limited Company

Private limited companies are owned by the shareholders and run by the directors of the company. It has limited liability so that the owners of the company are only liable to the amount they have invested in the company, should the company be unable to pay its own debts. Having a private limited company can also create a more prestigious and established brand image to customers and build their confidence that the business will provide a quality product or service.  Many people choose to set-up as a limited company for these reasons and the tax savings which can be made.

Sole Traders / Partnerships

Sole traders and partnerships are owned by one or more persons who use their own name or a trading name for the business. This structure has unlimited liability and so the owner/s possessions are at risk should the business be unable to settle its creditors.

Limited Liability partnerships

With this structure some or all of the partners have limited liability and this structure may have some tax advantages in specific circumstances. However, this structure is less common than private limited companies because of the extra administrative costs.

For more information about business structures please visit our free video guide “Introduction and Business Structures” at the following link or call our company formation helpline on 0844 893 0808.

http://www.youtube.com/watch?v=Yx_-oCw5BRY

To set up a private limited company please go the link below and our company formations support team are happy to help and answer any questions you may have.

https://www.wisteriaformations.co.uk/uk_company_registration