Before forming your company, Platinum One Accountants will discuss the most suitable structure for your business – Sole Trader, Partnership, Limited Liability Partnerships (LLP) or Limited Company.
This is the simplest form of business since it can be established without legal formality. The profits are automatically yours, since there is no separation between you and the business.
You will need to file a Self Assessment Tax Return each year and make National Insurance Contributions. Platinum One Accountants can help you with your Self-Assessment. However, a sole trader will be subjected to Unlimited Liability. This means you are liable for any debts that your business incurs.
A Partnership is similar to a sole trader. This legal relationship is formed by the agreement between two or more individuals to carry on a business as co-owners. A partnership is a business with multiple owners, each of whom has invested in the business. Some partnerships include individuals who work in the business, while others may include partners who have limited participation and also have Limited Liability.
A partnership, as distinguished from a corporation, is not a separate entity from the individual owners. The partnership income tax is paid by the partnership, but the profits and losses are divided among the partners and paid by the partners, based on their contractual agreement.
A Limited Company allows owners to be separate legal entities from their company. This means they have a Limited Liability and are not usually liable for any financial difficulties faced by the company.
Once you have decided which business structure is the most appropriate, Platinum One Accountants can assist you in your company’s formation:
- Company Limited by Shares – The company is owned by shareholders, each of whom will have a certain number of shares in the company that they have ownership of.
- Company Limited by Guarantee – The company does not issue shares and does not have shareholders. It has members who will have control of the company.
- Limited Liability Partnership (LLP) – This is combination of a partnership and a company; limited company by shares. There needs to be a minimum of two members and partners in a LLP.