Business Type & Structure
“About half my time is spent on business operation type stuff.” – Mark Zuckerberg
You will need to elect a business type or structure for your business and getting this right is essential – making the wrong choice can change how much tax you pay and how you account for your business.
Once you have completed your pre-planning research and have a fairly high level of confidence that the market exists for you business idea, there are several key considerations and choices you need to look at.
In essence there are four main options –
- Sole trader
- Limited liability partnership (LLP)
- Limited company
Being a sole trader simply means that you register with HMRC as a self-employed person.
A partnership is considered on the same basis as a sole trader but obviously requires all parties within the partnership to register on the same basis. It is also very important to have a partnership agreement in place to ensure everybody involved knows exactly what they are expected to contribute and what their liabilities and obligations entail.
We’ve provided a couple of guides on sole traders and Limited companies but there is much more information about all the different options at https://www.gov.uk/topic/company-registration-filing/starting-company
Structure your business effectively from the start, understand your needs and the businesses needs