I've recently decided to start my own business and I understand that there are many different ways in which I can structure it. Can you give me any advice?
There are different forms in which a business organisation can operate and the choice of which form and structure you wish to adopt can be made from receiving a combination of legal implications and advice, which is where we can assist, and the taxation treatment both in relation to annual taxation and capital taxation.
Advice in respect of taxation will be obtained from your accountant who we will liaise directly with and often suggest a three way meeting with us, you and your accountant. It is important that you involve us from the outset so that we can advise you in relation to the advantages and disadvantages of each structure and in particular the degree of protection and liability and the necessary procedures and documentation that is required to set up the form of business organization required.
To summarise, a sole owner operates as a sole trader and therefore self-employed without any separate entity. If a Limited Company is formed it has its own separate entity and your liability as a shareholder is limited to the extent of your investment. A higher degree of administration and in consequence time and effort, is required with a Limited Company. A standard partnership will not allow for limited liability as each partner is liable for the debts of the business and in the event of insolvency the personal assets of the partners can potentially be vulnerable.
The potential prosperity of the business is an essential consideration in this regard. If the partnership route is attractive to you but you want to avoid the concerns in respect of liability it is worth considering setting up a Limited Liability Partnership as this will create a separate legal entity and your liability will be limited to the extent of your investment.
We can provide legal advice to assist with determining the most suitable and appropriate business structure for you and prepare and draft all the necessary forms and documents required to form your business with the protection it necessitates.