What’s the difference between a limited company, LLP, partnership or sole trader?
It’s a company that gives you protection in law. It stops a claimant from pursuing company directors directly, i.e. go after their house of personal possessions. Therefore, it offers limited liability. Also, if the company happens to go bust those involved in the company, the shareholders, only have to pay the value of their shares, rather than all the company’s debt. More info, click here.
A limited liability partnership is typically for businesses that operate as a traditional partnership such as solicitors, dentists, architects and other professional services etc. A LLP is owned by the companies ‘members’ or ‘partners’, of which there must be a minimum of two (but there’s no maximum). There isn’t any directors or shareholders. More info, head to this website.
A sole trader is a business run by an individual, and is self-employed. This type of business means that once you’ve paid tax on your profits, you can keep the rest. To set up as a sole trader click here. For the advantages and disadvantages, this website is super helpful.
Partnership companies are those owned by two or more people. With a partnership the responsibility and decision making is shared. Thinking of setting up a partnership? Head to the government website, here.
This page was put together in collaboration with Alliotts Chartered Accountants & Business Advisors. If you’re starting a business and need a hand getting set up, take a look at their website (linked above) or give them a call on +44 (0)20 7240 9971.