There are a number of different company structures in the UK, and choosing the right one for you is important.
When looking to achieve great results, you need to ensure that your chosen business structure balances the needs of protecting your personal finances with maximising your income and minimising your tax burden.
Here is a quick summary of some of the business structures that you need to consider:
As the owner of the business, you are entitled to keep all profits, but you are also liable for all debts and have limited tax planning opportunities.
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.
A 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 but partners continued to be taxed on their share of profits, regardless of amounts drawn.
A private company is incorporated and usually 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.
The company is taxed on it’s profits, and directors or shareholders only on any amounts they withdraw as a salary or dividend. This allows for more flexibility around tax planning.
There are 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.
Choosing the right business structure
Whether you are just starting out or looking to transition to a new business model, having a team of experts behind you is the key to achieving great results.
Our great people have years of experience supporting owners to choose the right business structure and helping them take full advantage of the benefits associated with them.
To find out how we can help you, please get in touch.
