Sole Trader
- You automatically become a sole trader by starting up a business on your own
- No legal requirement to register name
- Public have no access to accounts, business remains confidential
- Autonomy
- Personal responsibility for all debts of the business
- Problems and decisions rest with just one person
Partnerships
Before entering a partnership, decide whether you trust your partner(s)-to-be with everything you own because that's what you will be doing
- No public access to accounts
- Easy to set up (no more than a handshake or a legal document amongst partners)
- Losses can be shared
- Risk and liabilities shared
- Problems and decisions shared
Draw up a partnership agreement for partners (Important to avoid problems later)
- How the business is to be financed
- How profits and losses are to be shared
- What will happen if one of the partners decide to leave
Limited Companies
- Limited liability
- Directors draw a salary
- Only one company with that name can be registered in the UK
- Finance raising can be easier (investment capital)
- Ownership can be transferred more easily
- Limited by shares
- Limited by guarantee
