Getting the legal structure right for your new business is critical.
Sole Trader
You may choose to operate as a sole trader. If you do, you need to bear in mind that as a sole trader you are personally liable, without limit, for all the debts and other liabilities of the business.
However, by operating as a sole trader, you will own all the assets of your business personally and have full control over its running, as well as making all the decisions affecting the business.
Partnership
You may decide to go into partnership with somebody else.
Partners are jointly liable for the debts and obligations of the partnership business and are also jointly and severally liable for the wrongful acts or omissions of their co-partners in the ordinary course of the partnership business.
Partnerships are not required to enter into a formal agreement to regulate the conduct of the business and the relationship of the partners although in practice it is a good idea to do so.
Private Limited Company
The most common structure for a new business is a private limited company. The liability of the shareholders is limited to the face value of their shares and the company is responsible for its own debts and liabilities. However, unlike sole traders or partnerships there are statutory procedures which must be followed such as annual filings of confirmation statements and annual accounts.
If you are a start-up business and need help on the right structure for your business contact Rob Moore on 0114 218 4051 or rob.moore@tayloremmet.co.uk
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