There are a number of different business legal structures in the UK.
Choosing the best corporate structure for your business is vital, to ensure that you balance the needs of protecting your personal finances with, maximising your income and minimising your tax burden.
As the owner of the business, you are entitled to keep all profits but you are also liable for all losses.
You and your partner(s) personally share responsibility for your business. Partners share the business profits, and each partner pays tax on their share. All partners are fully responsible for any business debts.
Limited liability partnership
Ann LLP protects the assets of the partners, limiting their liability to the amount they have invested in the business, together with any personal guarantees against loans.
A private company is incorporated and limited by shares. A shareholder’s personal assets are protected in the event of company insolvency, but money invested in the company may be lost.
There a number of other business structures including community interest companies (CICs) and co-operatives.
There are advantages and disadvantages to each type of business structure, so it is important to seek expert help to ensure that you choose the best option to suit your business and personal needs.