![\"Front](\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/4\/2022\/09\/06164254\/uk-startup-manual-290x410-1.jpg\")
\n LegalVision’s Startup Manual is essential reading material for any startup founder looking to launch and grow a successful startup.<\/p>\n <\/div>\n \n\nDownload Now<\/a> <\/section>\n <\/div>\n\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n
In the UK, businesses typically adopt one of four structures. These structures are: <\/p>\n\n\n\n
- \n
- sole trader; <\/li>\n\n\n\n
- general partnership; <\/li>\n\n\n\n
- limited liability partnership; and<\/li>\n\n\n\n
- limited company. <\/li>\n<\/ul>\n\n\n\n
There are legal and tax implications tied to the business structure you choose. The following table outlines the differences between each one. <\/p>\n\n\n\n
Business Structures<\/h4>\n\n\n\n
Structure <\/strong><\/td> Practical Implications<\/strong><\/td><\/tr> Sole Trader<\/strong><\/td> Registering with HMRC as a sole trader means that you work for yourself. You will pay income tax and national insurance contributions through self-assessment. <\/td><\/tr> Business Partnership <\/strong><\/td> A business partnership is an arrangement where one or more individuals come together as business partners. Each partner is responsible for paying tax on their share of the business.
To establish a business partnership, you will not need to register with Companies House as you are not establishing a company. You will, however, need to register with HMRC. <\/td><\/tr>Limited Liability Partnership <\/strong><\/td> Registering a limited liability partnership (LLP) with Companies House means your business is a separate legal entity to you and your fellow partners. The LLP model protects its members\u2019 assets, limiting their liability to however much they have invested in the business and any personal guarantees they may have given when raising loans.
Similar to a business partnership, one or more individuals come together as partners. However, this structure is distinct from a business partnership because the business has its own legal personality. An LLP can own assets and can also initiate and defend legal action. Partners have joint but limited liability.
As in an ordinary partnership, the members\u2019 profit share is taxed as personal income. LLPs must also register at Companies House. Additionally, a members\u2019 agreement should state the profit share each member receives.<\/td><\/tr>Limited Company<\/strong><\/td> A limited company establishes a business as a separate legal entity. In contrast to the LLP structure, partner liability depends on their investment level. You must also register with Companies House to opt for the limited company structure.
Note that the liability of shareholders depends on their investment level. However, directors may have personal liability in certain circumstances as they have directors’ duties to comply with.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n2. Intellectual Property Protection<\/h2>\n\n\n\n
Your new business\u2019s image, products, and services define its distinctiveness in the market. Essentially, these elements form the core of your business\u2019s significance. Safeguarding and controlling these assets protects your brand and secures your business\u2019s value and competitiveness in the market. <\/p>\n\n\n\n