act
Business

Business
Structure

Selecting the perfect business structure is paramount, as you already know. Whether launching or adapting to growth, regular reviews of your business structure are essential for success. At RR Accountants, we offer expert guidance, ensuring you're well-informed on the pros and cons of various business structures tailored to your unique journey.

Sole trader

Partnership

Limited company

Limited Liability Partnership

Request a consultation

Sole Trader

In the UK, sole proprietorship reigns supreme, constituting 56% of all businesses in 2021, with 3.2 million enterprises. Ideal for smaller businesses, especially those without employees, this structure is a popular choice. At RR Accountants, we specialise in optimising the potential of sole proprietorships for thriving business outcomes.

Here're some advantages of Sole Trader Business Structure:

Streamlined setup process: simply notify HMRC of your tax arrangement through Self Assessment.

Wield full control over every business decision.

Liability is a key consideration for sole traders, as personal assets, including your home, are at risk for business debts. RR Accountants advise smart solutions, like investing in public liability insurance, to mitigate risks effectively.

Limited Company

When you establish a limited company, your business transforms into a distinct legal entity. As the shareholder and employee, you gain various advantages:

•

Your personal liability is confined to the invested share capital, offering a shield against extensive risks.

•

Enjoy potential tax savings, as profits are subject to corporation tax, often at a lower rate than income tax. Careful consideration of salary and dividends is crucial for optimal profitability.

•

Ideal for expansion, limited companies provide superior structures for employing staff compared to sole proprietorships.

Enquire about setting up a limited company

Partnerships

In a partnership, individuals collaborate, sharing profits taxed through Self Assessment for Income Tax. Like sole proprietorships, partners have personal liability for business debts. A drawback: if one partner can't meet their debt share, others may be liable. RR Accountants offer insights to navigate partnership intricacies for seamless collaboration and risk management.

Limited Liability Partnerships

A Limited Liability Partnership (LLP) merges the features of a traditional partnership and a limited company. Partners enjoy limited liability for the partnership's debts but bear additional statutory and administrative obligations. Individually, partners are considered self-employed for tax purposes and taxed on their entitled profit share.

LLPs suit larger partnerships, yet some may discover the benefits of a limited company structure. It's crucial to seek expert advice before restructuring. Connect with us today for tailored guidance if you're contemplating a partnership setup.

Ask us for advice on partnership

Frequently asked questions about

Business Structures

What are the different structures of a business?

Business structures include sole traders, partnerships, limited liability partnerships (LLP), and limited companies (Ltd or PLC), each with unique features and legal implications.

How do I choose the right business structure for my needs?

Consider factors such as liability protection, tax implications, management preferences, and future growth plans when selecting a business structure. Seeking professional advice is advisable.

How does business structure affect liability?

Business structures like sole traders and partnerships expose owners to unlimited liability, while structures like limited companies and LLPs offer limited liability protection.

How does business structure impact taxation?

Taxation varies based on the chosen structure, with sole traders and partnerships being taxed as individuals, while limited companies and LLPs have separate tax obligations.

What services do you offer for Limited Liability Partnerships (LLPs)?

For Limited Liability Partnerships (LLP), we provide assistance with formation, partnership agreements, accounts preparation, tax planning, and compliance matters.

What are the advantages of operating as an Ltd?

Advantages of Ltd. include limited liability protection for shareholders, flexibility in management, potential tax benefits, and enhanced credibility with customers and suppliers.

Still have questions?

Speak to an expert