When setting up your own business, there are three possible structures you can choose to adopt:
Sole trader
This is the most straightforward way to set up your own business.
- As a sole trader, you are the owner of the business
- You are legally liable for the business and do not have any protection if the business fails
- If the business is not successful, all of your assets (business & personal) can be used to pay off your creditors
Private limited company
- A legal entity, separate from its shareholders
- If the business fails the shareholders are only liable for any amount outstanding on the share capital they subscribe
Partnership
- An agreement between two or more people to go into business together
- If the business fails, each partner is liable for all losses
- A ‘Deed of Partnership’ is usually drawn up outlining the obligations of each partner
Please note: it is highly recommended that you consult an accountant or solicitor before choosing an ownership structure for your business
