Trying to understand what legal structure you should have in place should be something every new company owner should think about. By determining the legal structure of an organisation should be based on how you intend to do business. There are three main categories of legal structures you should know about. This blog will give you advice on the legal structure your business is best suited for.
You are personally accountable for your business’s debts and financial responsibilities. There are many titles of employment that fall under the category of sole traders, such as a self-employed worker, freelancer or anyone who is the executive owner of a business. This means you take all the profits after tax, but also can suffer from losses.
A sole trader legal structure has many advantages. It allows for greater control of your business, the ability to pay your own wages and working around a flexible clock. However, a big disadvantage is that you have unlimited liability over everything in your business. This means if you were to go into debt, your personal assets are likely to be seized.
This legal structure is the simplest way for 2 or more people to run a business together. You share the responsibility for your debts. In this scenario, two parties share the management and profits of a business.
You can learn more about how to set up a business partnership here.
In a limited company legal structure, the liability of members or shareholders of the company is limited to what they have invested or contributed to the company. Limited companies may be limited by shares or commitments and guarantees. The former may be further divided into public companies and private companies.
The more active your involvement is, the more reporting and management responsibilities you will have. Some people opt for help from a professional and our experts at Carrington Blake Accountancy can help you with these processes.
How we can help
Carrington Blake Accountancy takes pride in taking care of all the legal and administrative aspects of company registration. We help businesses with financial advice tailored to their unique requirements. We save our clients the trouble of financial stress and we enable your business to grow with our advice.
To find out more about accounting services, contact us today on 0207 537 6628 or leave us an email at email@example.com. If you have a question or would like further information, why not chat with us now?