Types of Business

A Limited Company

A distinct legal entity with an independent legal existence, separate from, and regardless of, its shareholders. It must have at least one director.

A Partnership

A business where two or more people own a business, work together and share the profits or losses on an agreed basis. There are no legal requirements to set up a formal partnership, but you should consider a legal written contract. A partnership can employ other people on a part-time, full-time or freelance basis. However, the partnership element is limited to the owners of the business.

A Limited Liability Partnership (LLP)

Similar to a standard partnership, except that the individual members are offered reduced personal responsibility for any potential business debts. As a result, LLPs are only recommended for profit-running businesses. LLPs are also slightly more complicated to set up and run than ordinary partnerships, as they have to meet many of the same requirements as limited companies.

A Sole Trader

A person who trades on their own without the use of a company structure or partners. They are entirely liable for the debts of the business. Any protection they take out will be on a personal protection basis.